The FTSE 100 was softer on Thursday as a raft of corporates updates disappointed markets and offset strong gains in CRH. A weaker session in the US overnight dented sentiment as Tesla sank 5%.
The FTSE 100 was trading down 0.15% at 7,901 at the time of writing. The German DAX was 0.35% weaker and French CAC was dead flat.
“Markets in the US ended down a little yesterday with the S&P 500 falling 0.47% to 3,951.39,and the NASDAQ composite following suit closing 0.66% to 11,379.48. The fall came as 10-year bond yields in the US climbed again, flirting briefly with the psychologically important 4% level,” said Derren Nathan, head of equity research at Hargreaves Lansdown
Beazley was by far the FTSE 100’s worst performer, down 10%, after the insurer said profit before tax nearly halved in 2022. A net investment loss wiped out any strength in their Cyber security business.
Taylor Wimpey followed Persimmon in warning of a tough trading environment in 2023 as higher mortgage rates curtail demand for properties. Taylor Wimpey was down only 0.5% after tanking in line with Persimmon yesterday.
CRH was the standout FTSE 100 performer as the construction company revealed a deft management of input prices with a 10bps increase in EBITDA margin. CRH shares were 10% higher.
CRH also said they were going to shift their primary listing to the US, a blow for the London Stock Exchange at the same time ARM Holdings said it has decided on the US for their listing.
“Now we’ve got the news from construction group CRH that it wants to switch its primary listing to the US. That would mean it no longer qualifies for inclusion in FTSE indices and therefore would leave the prestigious FTSE 100 index,” said Russ Mould, investment director at AJ Bell.
“There is logic to the move. A large chunk of CRH’s earnings come from the US, so that’s where it spends a lot of time both operationally and talking to investors. There is also the fact that it could get a higher valuation by trading on the US stock market which could come in handy if it wants to issue shares for acquisition deals. Plumbing group Ferguson did exactly the same thing.”
“Efforts to relax the listing rules to attract more companies to London come across as a bit desperate. It should be a badge of honour to list in the UK, but that reputation is dwindling fast. Overseas investors lost interest in the trading venue as soon as the UK voted in favour of Brexit, and valuations have got even cheaper. That’s hardly a good sales pitch to attract more big companies to the UK market.”