The FTSE 100 fell on Thursday as European stocks tracked a sell-off in US shares sparked by rising concerns about US debt.
London’s leading index was down 0.7% at the time of writing.
“The growing mountain of US debt is causing ripples of worry across financial markets, with signs investors are baulking at financing the Trump administration,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“These concerns have hit sentiment in Europe, given the repercussions that financial difficulties in the world’s largest economy would have on the global economy.”
After a record-breaking run of consecutive up days as the FTSE 100 recovered from Trump’s Liberation Day, the pace of London’s gains has slowed this week as the market pauses for breath and concerns about long-standing risks such as the US debt mountain serve as a reality check.
Nonetheless, we are in an infinitely better position than we were in the days following the announcement of Trump’s trade policies, with many market participants remaining bullish on global stocks, despite a number of risk events in the near term.
“Peak trade uncertainty remains in the rear view mirror, incoming data remains resilient for the time being, with incoming earnings also not as bad as had been feared,” said Michael Brown, Senior Research Strategist at Pepperstone.
“That said, I’d imagine that the risk of Nvidia (NVDA) earnings next Wednesday is starting to play on a few minds, and wouldn’t rule out the chance of a bit more de-risking into that report.”
De-risking was rife in London on Thursday, with 86 of the FTSE 100’s constituents trading negatively at the time of writing.
“The FTSE 100 was dragged down by energy stocks and a negative reaction to BT’s results. Marks & Spencer extended yesterday’s small advance as investors saw a path out of the cyber-attack disruption,” explained Russ Mould, investment director at AJ Bell.
BT shares were down 3% as investors booked short-term profits after the group released a mixed set of full-year results.
“A clear sign a company is lacking in focus is when they attempt to do too much and BT is a classic example. Typically, it is the job of new management to come in and streamline operations and bring their attention back to what they are good at,” Russ Mould said.
Housebuilders were among those firmly in the red with Taylor Wimpey, Persimmon and Barratt Redrow all down around 2%.
JD Sports was the FTSE 100 top riser as the sports retailer recovered some of the losses suffered yesterday after issuing a disappointing set of results.