The performance of the FTSE 100 matched the weather in London on Tuesday: rather dull and soggy.
A ‘wait-and-see’ mentality was evident in stocks on Tuesday with a raft of economic data due to be released on the horizon, which has the potential to move the dial in terms of sentiment.
“Markets remained in a holding pattern, awaiting the next wave of inflation, manufacturing and GDP data to see if it is possible to second guess when central banks might press the magic ‘cut’ button on interest rates,” says Russ Mould, investment director at AJ Bell,” said Russ Mould, investment director at AJ Bell.
“The Nasdaq tried and failed to hit a new record high last night on Wall Street, even though it is only a whisker away. The FTSE 100 was stuck in the mud as a rebound in AstraZeneca following yesterday’s broker downgrade-induced sell-off was offset by weakness in the technology and industrial sectors.
“Stronger than expected labour data from the UK didn’t help matters as it effectively gives the Bank of England another reason to keep rates steady and not rush to cut them. That’s more of a negative to domestic stocks rather than the large chunk of FTSE members which do business overseas.”
There was also weakness in the UK’s housebuilders after the Conservative government’s latest attempt at revitalising UK property came down like a tonne of bricks on investors.
Persimmon, Taylor Wimpey and Barratt Developments were all down in the region of 4% at the time of writing after reports the UK government were to make brownfield planning applications easier.
While the proposals would help create new homes, there will be scepticism that this is an attempt to win votes rather than a formula to fix the UK’s housing problems.
There were very few gainers on Tuesday, with GSK providing some support, rising 1.6%.
