Proactive Investors -
- FTSE 100 falls 61 points to 8,237
- Nvidia (NASDAQ:NVDA) suffers largest ever single-day market cap loss overnight
- Direct Line and Barratt report results below expectations
Oil prices at lowest since December
Oil prices are continued to plunge, which is why Shell PLC (LON:SHEL, NYSE:SHEL) shares are down 1.2% and BP PLC (LON:BP) is down 0.8%.
Brent crude futures have dropped another 1.2% to $72.86, their lowest level so far this year, down 10% since the start of last week.
The US-priced West Texas Intermediate fell to US$69.84, with December the last time prices were below $70.
This seems to be on news that a dispute may have been resolved which had seen Libya’s output severely curtailed.
It also reflects speculation that the eight main members of the OPEC+ cartel are likely to ease off their voluntary production cuts and will turn the taps on more fully in October.
Widespread selling
There are only three FTSE 100 companies in positive territory this morning, they are big tobacco pair BAT (LON:BATS) and Imperial, along with caterer Compass.
Telecoms duo Vodafone (LON:VOD) and BT (LON:BT) were in green for a while but have dropped out of the exclusive list.
The index is down 0.8% so far, with Germany's DAX and France's CAC 40 also falling by roughly the same.
"Fresh worries about the health of the global economy have gripped markets, with the FTSE 100 far from immune given the international leaning of the index," says Susannah Streeter, head of money and markets at Hargreaves Lansdown (LON:HRGV).
"Although the S&P 500 and FTSE 100 are still not far away from record highs, there is uncertainty creeping in about the prospects ahead," she adds.
"There could be an element of post-labour day holiday blues at work, but it appears concerns were prompted by weaker than expected US manufacturing data, highlighting the ongoing damage wrought on orders and output by high interest rates."
She notes that the last big wobble in late July and early August was followed by a rebound, but that September is historically the worst month for stock performance, "so it’s 'hold on to your hats' time, with more volatility expected".
Barratt slashes dividend
Shares in Barratt Developments PLC (LON:BDEV) are among the fallers, no surprise there this morning, but this comes on the day that it announces final results, where it cut its dividend by more than half to reflect a squeeze on earnings amid a strained housebuilding environment.
Basic earnings per share fell by 78% to 11.8p as home completions in the year came to 14,004, which was at the upper end of guidance but still nearly a fifth lower than in the 2023 financial year.
It expects these levels of demand to persist, reiterating expectations of between 13,000 and 13,500 home completions for the year to June 2025, but plans to deliver 1.5 million new homes over the next five years.
Chief executive David Thomas stated that Barratt is "well-positioned to meet the strong underlying demand" and welcomed the new government's proposed reforms of the planning system as "one of the key levers to increase housebuilding".
FTSE 100 falls as expected
The FTSE 100 has fallen as the open, on track for a fourth day of losses, with a 55-point slide to 8,244 in the first few minutes of trading.
An intraday low of just over 8,219 in the first minute was the lowest since 13 August, three weeks ago.
Only four of the top 50 largest companies in the index are in positive territory.
Scottish Mortgage Investment Trust PLC (LON:SMT) is one of the big fallers after the US tech sell-off last night.
But Airtel Africa (LON:AAF), ConvaTec (LON:CTEC) and JD Sports are bottom of the list, down 9.3%, 5% and 2.7% respectively.
Direct Line resumes interim dividend but numbers disappoint
First-half results from Direct Line Insurance Group PLC (LON:DLGD) saw it resume paying an interim dividend but profits were below analyst expectations as new chief executive Adam Winslow makes some big changes for the insurer.
While the insurer reported a swing to a £61.6 million pre-tax profit from a loss of £76.3 million last time, it was not as big as the City was expecting.
Also, the combined ratio of 98.2% was down from 108.8% a year ago and worse than the City consensus forecast, with the dividend also not as big as predicted.
SEGRO agrees takeover of European rival
OK some London-listed company news now - FTSE 100-listed warehouse property developer SEGRO PLC (LON:SGRO) has agreed a takeover of Tritax EuroBox PLC (LON:EBOX) in an all-share offer.
The two boards announced a deal has been struck where shareholders in Tritax EuroBox will for each share they own get 0.0765 new SEGRO shares, plus will be entitled to receive a dividend of 1.25 euro cents per share (1.05p at the current exchange rate) for the quarter ending 30 September.
Based on the last closing of 880p of SEGRO's shares, the share element of the offer is valued at 67.32p and with the dividend that makes an offer price of roughly 68.37p, in line with the Tritax EuroBox closing price of 68.4p.
SEGRO said the offer represents a premium of 27% compared to the Tritax EuroBox closing price of 53.8p on 31 May, which it said was the last day before it made the offer.
Nvidia falls further afterhours
Nvidia tumbled almost 10% due to "the broader macroeconomic worries and suspected AI fatigue", says Swissquote Bank analyst Ipek Ozkardeskaya.
The fall erased $278.9 billion in value – the biggest single-day loss ever.
Then it fell another 2.42% in afterhours trading.
This was on news that the US Department of Justice sent subpoenas to the company because it suspects that Nvidia violated antitrust laws, made switching harder to other chipmakers and penalized companies that didn’t use Nvidia’s AI chips exclusively.