Market report

Insurers plunge | Barratt | Hays | Galliford Try


5pm: FTSE 100 falls

The FTSE 100 suffered a thumping 116.56 points loss (1.63%) to close at 7,039.81 as talk of a big hike in US interest rates gathered pace.

Inflation has hit insurers with a number of companies in the sector trading lower.

Admiral Group plunged 18.11% and Direct Line Insurance slid 11.68% after motor insurer Sabre Insurance said it expected to pay out a smaller dividend for 2022, as it warned over the impact of claims inflation.

Barratt Developments fell 1.46% after it said annual profits were on track to beat forecasts following buoyant demand for new homes, but warned of rising build costs.

Taylor Wimpey and Berkeley Group also lost ground, losing 1.61% and 0.71% respectively, although Redrow bucked the trend to jump 4.67% after announcing a £100m share buyback.

7am: Barratt Developments

Britain’s biggest homebuilder Barratt Developments is forecasting annual profit slightly ahead of market expectations, underscoring robust demand against supply chain constraints and labour shortages.

The FTSE 100 firm said it expected annual adjusted profit before tax for the year ended 30 June to be in the range of £1.05 billion to £1.06bn, marginally ahead of company estimates.

7am: Hays

Recruitment agency Hays posted record quarter with fees up 23% and 15 country fee records. Perm up 31%, with Temp up 16%, both helped by continued improved margins.

Fees and activity levels were sequentially stable through the quarter and the group’s fee growth exit rate was 19%

Group operating profit for FY22 is expected to be c.£210 million, at the top end of our previous guidance.

7am: Dr Martens

Shoe retailer Dr Martens said trading since the start of this financial year is in line with expectations and the guidance set out with year end results.

7am: Galliford Try

Pre-exceptional profit before tax to the end of June is expected to be at the upper end of current analyst forecasts.

The construction company says it has a high-quality order book of £3.4bn (2021: £3.3bn) and strong pipeline of future orders. 90% of revenue for the new financial year secured (2021: 90%).

Global markets

Attention continues to be focused on US inflation and the direction of interest rates.

Futures traders are now pricing in a nearly 80% probability of a full percentage-point rise at the coming meeting, according to an analysis of the contracts by CME Group.

Other central banks are also feeling the heat with the Bank of Canada on Wednesday raising its benchmark interest rate by 100 basis points in a bid to tame soaring inflation, a surprise move and its biggest in nearly 24 years.

After a fairly volatile session overnight, US markets closed lower but well above their earlier lows. The Nasdaq index finished just 0.15% in the red, while the S&P 500 dropped 0.45% and the Dow Jones lost 0.67%.

Japan’s Nikkei rose 0.7%, as the yen’s weakness against the dollar boosted exporters.  In China, the Shanghai Composite was up 0.2%, but the Hang Seng index in Hong Kong was down 0.2%. In Sydney, the S&P/ASX 200 was 0.5% higher.

London’s blue-chip FTSE 100 index closed 53.4 points lower at 7,156.37.

Sterling was quoted at $1.1855 early Thursday, down from $1.1929 at the London equities close on Wednesday.

The euro traded at $1.0023 early Thursday, after dipping below parity.

Brent oil was trading at $100.21 a barrel early Thursday, down from $100.80 late Wednesday.

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