The Legal & General share price has been ravaged by the global interest rate hiking cycle. Truss’s doomed mini-budget and subsequent fallout in UK debt markets a year ago exacerbated the company’s awful performance.

After the recovery from the pandemic, Legal & General shares were trading above 300p in early 2022. Since then, the company has suffered a string of external setbacks that have culminated in a Legal & General share price just above 200p.

Legal & General’s operating profit fell 2% to £948m in the first half of 2023 as the company navigated challenging conditions. Their investment and retail segments were the most heavily impacted as interest rates hit the value of investments.

Nonetheless, the company pushed on with a 5% dividend hike. Legal & General dividend now yields 9.3%.

Investors will be concerned the dividend has failed to bring meaningful interest into the stock, with shares continuing to slide despite the dividend being covered around 2x.

It is all too apparent the macroeconomic environment is driving the Legal & General share price. Considering that markets are pricing in another rate hike by the Bank of England, further declines in Legal & General are entirely plausible.

From a valuation perspective, Legal & General is trading at 10x forecast earnings which isn’t overly good value, especially in the current climate. This could fall to 7x – 8x before bargain hunters flood in. This would suggest a price of around 140p -160p if earnings forecasts remain the same.

Indeed, if 200p is broken, the next major support levels stand at around 180p, 160p and 140p, based on previous price action. 180p is certainly a level many investors will have limit orders.

For 180p to break, it would assume severe disruption in financial markets that would bring 160p and 140p into play.

Trade in London’s leading shares reflected ongoing concerns about the conflict in the Middle East although tentative signs of de-escalation sent oil prices lower.

The FTSE 100 was down 0.3% to 7,376.

Equities were heavily hit last week on fears forces aligned with Iran would enter the conflict and risk a region-wide war.

“Markets remain edgy amid the ongoing conflict in the Middle East, with the FTSE 100 pulled lower by commodity stocks,” said AJ Bell investment director Russ Mould.

“This followed a reverse in oil prices on reports Israel plans to delay its ground invasion of Gaza. Any sign of de-escalation would be received positively for humanitarian reasons but also by investors wary of the risks of the war in Gaza spreading to other parts of the region or bringing in other actors.”

In addition to concerns about the Middle East, the continued march higher in US treasury yields weighed on global equity markets and sent US futures lower.

Looking past the gloom, Mould pointed to US earnings this week and a raft of earnings releases from technology companies that have previously provided support for markets.

“This week the US earnings season really hots up with earnings reports from a good chunk of the ‘Magnificent Seven’ of tech stocks who, like their cinematic counterparts, have been standing tall alone against a wave of malign forces this year.”

FTSE 100 movers

The FTSE 100 top fallers were dominated by commodities companies, including Glencore, Anglo American, and Fresnillo, as iron ore futures slipped back from recent highs.

However, there was selling across a variety of sectors on Monday, with names such as Segro, Unite Group and BT suffering on the day.

Flutter Entertainment was the top riser gaining 2.5% as bargain hunters stepped in after a prolonged period of selling.

Belluscura has received an 89.6p ($1.09, GBP/USD: 1.2164) midpoint valuation from Stonegate Capital in a research note issued last week.

Stonegate Capital used a blended approach to their valuation, encompassing EV/Sales, EV/EBITDA, and BV/Share ratios, and comparing Belluscura to a group of their peers.

The peer group includes Axonics, Inc, Penumbra, Inc, and Glaukos Corporation.

“We are using a comparison analysis to help frame valuation. Given the current stage of the product life cycle we are looking forward to 2025 for our valuation metrics. When comparing Belluscura to its peers we look at it through a EV/Sales, EV/EBITDA, and a BV/Share lenses. By averaging these valuations, we arrive at a valuation range of $0.72 to $1.10, with a midpoint of $1.09.”

Belluscura shares were 2% higher at 27.5p at the time of writing on Monday.

After receiving orders, securing a royalty agreement and announcing further indications of orders totalling $85m, Belluscura has recently announced a funding package including the takeover of TMT Acquisitions, and an equity and convertible loan note issue.

MISSION Group shares tanked on Monday after the marketing company said it now expects full-year profits to be “materially below market expectations,” as challenging trading conditions persist.

The marketing communications group forecasts headline pretax profits of no more than £3.1 million for 2023. This includes £1.2 million in costs from a business to be divested.

MISSION Group shares were down 67% at the time of writing.

The downgraded guidance comes as key clients in consumer, property and automotive sectors reduce or defer ad spending. Recent trading has been “more challenging than anticipated.”

While full year revenue is still expected to grow 8-9%, MISSION has commenced an operational review to cut costs. This includes headcount reductions to benefit 2023 and 2024.

The group also cancelled its 0.87p interim dividend to preserve cash. Net debt jumped to £25.5 million in October from £14.9 million in June.

MISSION remains in talks with NatWest bank regarding a covenant waiver, as higher debt pushes leverage ratios above current limits.

The board said it is “extremely disappointed” by the change in trading. But it believes MISSION is positioned to benefit as markets improve given continued investment in capabilities.

AFC Energy’s next-generation ammonia cracker technology has successfully achieved 99.99% hydrogen from single reactor testing, meeting international standards for fuel cell applications, new test results show.

AFC Energy shares were 4% higher at the time of writing on Monday.

Independent analysis by the UK’s National Physical Laboratory confirmed the hydrogen derived from AFC Energy’s ammonia cracker and purifier contains ammonia at levels below limits in the ISO 14687:2019 standard for fuel cell grade hydrogen.

The results highlight AFC Energy’s ammonia cracking technology can deliver fuel cell grade hydrogen on a modular, scalable basis.

The ability to meet the ISO standard for residual ammonia “parts per billion” in hydrogen is a key milestone for the cracker technology. It demonstrates potential to support growing “ammonia to power” uses in stationary and maritime applications.

Cracking ammonia into hydrogen also enables use for refueling heavy duty hydrogen fuel cell vehicles. This provides an alternative to small scale electrolysis for distributed hydrogen production.

The ammonia cracker converts ammonia into discrete hydrogen and nitrogen molecules. The trace ammonia presence can damage fuel cells if not removed.

Meeting the ISO standard was tested based on individual ammonia cracker reactors. Independent analysis by the UK’s National Physical Laboratory confirmed the residual ammonia results.

The FTSE 100 was set to close lower on Friday and end a week many investors will be pleased to see the back of. The tragedy unfolding in the Middle East and nagging concerns around interest rates have hit sentiment, sending major global equity indices lower.

London’s leading index was down 1.1% at the time of writing on Friday.

Only 16 of the 100 FTSE 100 constituents gained on the week as investors choose to sell cyclical sectors and those exposed to interest rates.

Defensive names were the best performers on the week. However, gains were limited with only one share, Endeavour Mining, gaining more than 2%.

“The FTSE 100 is on track to end the week nearly 2% lower, the result of a challenging period for investors worried about war in the Middle East, interest rates potentially staying higher for longer and mixed messages from large corporates in the US,” said Russ Mould, investment director at AJ Bell.

There was little in the way of major corporate news on Friday, with InterContinental Hotels standing out after providing a Q3 trading update.

“InterContinental Hotels echoed the positive sentiment seen earlier this week from Whitbread,” said Russ Mould.

“Hotels are in rude health as demand is strong which enables operators to push up room rates. InterContinental has been busy buying back shares and it looks as if shareholders will get an update next February on future plans to spend surplus cash.

“However, the key sticking point for investors is the rate of growth for revenue per available room, which slowed in the third quarter versus the first-half period.”

InterContinental Hotels was down 3.7% at the time of writing.

Rentokil Initial had another bad session, losing 4%, after issuing a warning on their North American business yesterday.

Ocado was the FTSE 100 worst performer as the food distribution company lost 5%.