With Jerome Powell’s hawkish appearance in front of Congress on Tuesday dragging the Dow Jones back below 25500, before sparking losses in Asia, the European indices didn’t stand much chance of avoiding a red start this Wednesday.
The FTSE fell 30 points after the bell, sending the index the wrong side of 7250 having struck 7340 in the first half of the week. The pound, meanwhile, continued to be beaten back by the resurgent dollar, with cable down 0.3% and stuck below $1.388.
Not only was the UK index dealing with the overall knock to sentiment dealt by Powell last night, but a set of mining stocks hurt by China’s weaker than forecast manufacturing PMI AND the disappointing updates from Taylor Wimpey (LON:TW) and ITV (LON:ITV). The housebuilder dropped 5.6% in the aftermath of its full year results, investors annoyed at the 6.9% drop in pre-tax profit to £682 million. That decline was caused by Taylor Wimpey having to set aside £130 million to cover 2017’s leasehold scandal, preventing the company from posting the 10.7% jump in pre-tax profit to £812 million it would have seen sans-provision.
As for ITV, the media firm is continuing to struggle with an advertising slowdown. Though net advertising revenue fell the expected 5% to £1.59 billion, leaving revenue generated by the ITV Studios division a hair’s breadth behind following a 13% increase at £1.58 billion, investors were understandably upset with a 6% drop in pre-tax profit to £800 million. New CEO Carolyn McCall’s promise that ITV would deliver positive NAR growth in Q1 and Q2 failed to adequately distract from that headline decline, with the stock plunging 7%. The good news for ITV investors, however, might be that any further fall in price could reignite the takeover rumours that have lingered around the company for a while now.
Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved. In relation to fixed odds, Spreadex Ltd is licensed and regulated by the Gambling Commission under licence number.