FTSE 100 Live June 30: House price growth slows, stock markets end quarter down

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FTSE 100 slides, Virgin Money up 2%

A turbulent half-year ends with investors suffering bigger losses after the FTSE 100 index fell 1.5%.

Hargreaves Lansdown senior analyst Susannah Streeter said: “A sense of foreboding is once again gripping financial markets, with growing concern that by tackling inflation, central banks risk seriously weaken economies.”

The FTSE 100 index fell 121.44 points to 7190.88, leaving the elite down more than 5% for June amid a deteriorating outlook.

London’s premier index is still one of this year’s best performers, helped by energy and defensive stocks as well as its robust dividend yield.

The 2.5% decline compares to bear market territory on Wall Street, where the technology-focused Nasdaq slipped 29% and the S&P 500 was down 20% in its worst first-half performance since 1970.

The S&P closed last night at 3818, with 72% of respondents in a survey of 475 market professionals by Deutsche Bank viewing 3300 as the most likely next stop than 4500.

Around 90% expect a recession in the United States by the end of 2023 or sooner, a view reflected in the sell-off mood in the London market today as shares of Burberry fell by 5% and British Airways owner IAG fell 3%.

Homebuilders were also under pressure amid slowing house price growth, with Persimmon down 4% or 73.5p to 1,841.5p.

Outsourcing firm Bunzl provided shelter for investors, rising 9p to 2680p after a robust trading update showed its ‘resilience’ with sales growth of 16%.

The FTSE 250 index, which has fallen 20% this year, fell 304.70 points to 18,734.09, with Aston Martin Lagonda among the stocks most under pressure after falling 9%.

Virgin Money rose 2% or 3.6p to 131.85p after launching a £75m share buyback plan and benefiting from a new price target of 220p from analysts at Goldman Sachs.

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City Commentary: The Future of the City

In the longer term, the City of London and the people who work there will thrive – it always does.

Brexit doesn’t seem to have done him(m) any favours, but that may be secondary to a wider global malaise – war and inflation.

In the short term, the Square Mile is rocky. There are (at least) two ways to go from here.

In the best-case scenario, income from investment banking work done six months ago lands about now (that’s how it works), boosting balance sheets and confidence.

Private equity firms with billions in cash that need a home find one – deals are done, the wheels are greased.

Central banks are getting inflation under control more quickly than expected. And the upcoming corporate earnings season is decent. This tells the stock market that it is unnecessarily worried and should take a chill pill.

Relief follows. The best champagne – ok, M&S Prosecco – is cracking up.

The alternative is for private equity to decide it likes the money it has, to hell with inflation. That fund managers so burned by the recent turmoil are no longer buying dips and going nowhere near an IPO.

Everyone is sitting there waiting for someone else to do something.

Big banks are posting lackluster second-half numbers and CFOs are stepping up the cost-cutting campaign.

Melancholy sets in and the HR departments are busy determining who it is best to fire.

It could go either way.

For our story today, we asked at least a dozen market participants for their perspective on the situation. Their conclusion: feels cold there.

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City prepares to eliminate summer jobs

Bankers are bracing for an elimination of summer jobs as business dries up and financial firms cut staff after overhiring in a race for talent over the past two years.

The market for new IPOs, buoyant last year, has almost completely dried up.

Fund managers are experiencing massive outflows of cash as people pull money out of the market. Brokers say they can’t even get financing for the most promising new tech companies.

Although there have been no major job cut announcements in the city so far, insiders say there is a drip of layoffs and fears that thousands more follow unless there is a market reversal.

Berenberg has already cut jobs in London and New York. Credit Suisse, Numis, RBC Capital are among those who, according to a city insider, are at least considering laying off people.

Numis had no comment. Morgan Stanley insisted it “will continue to hire good people”, taken as code for the city’s job cuts.

find out more here

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The FTSE 100 ends a semester down sharply

Today’s performance in European stock markets was in line with the first half of the year after the FTSE 100 index fell 1.8% or 131 points to 7180. Benchmarks in Paris and Frankfurt fell fell more than 2%.

Richard Hunter, head of markets at Interactive Investor, said the lack of immediate positive catalysts and guarded comments on the outlook from central bankers in Portugal yesterday contributed to the selling pressure.

He said: “The losses are widespread, with particular weakness impacting retailers and miners, while homebuilders come under additional pressure given the challenges facing the UK economy.”

The FTSE 100 index is down more than 2.5% at the end of the half, but that compares favorably to other markets. The Nasdaq is down nearly 29% year-to-date, while the S&P 500 is heading for its worst first-half performance since 1970.

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Nationwide reports slower house price growth

The price of a typical UK house hit a new record high of £271,613 in June, with Nationwide reporting that average prices have risen by more than £26,000 over the past year.

There are tentative signs of a slowdown, however, with the number of mortgages approved for home purchases falling back towards pre-pandemic levels and surveyors reporting some slowdown in inquiries from new buyers. Average prices rose 0.3% month-on-month in June, from 0.9% in May, and annual growth fell from 11.2% to 10.7%.

Overall, Nationwide Chief Economist Robert Gardner said the housing market had retained surprising momentum given the mounting pressure on household budgets from high inflation.

He said: “Some of the resilience probably reflects the current strength in the labor market, where the number of vacancies has exceeded the number of unemployed in recent months.

“Furthermore, the unemployment rate remains close to 50-year lows. At the same time, the stock of housing in the market remained low, which helped maintain upward pressure on house prices.

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Downward move for markets, Bitcoin below $20,000

A turbulent first half ends with European stock markets under pressure as IG Index predicts the FTSE 100 will open 61 points lower.

The downtrend follows a lackluster session in New York, where the S&P 500 index is heading for its worst first half since 1970.

The benchmark was slightly lower last night after a gathering of central bank leaders including Federal Reserve Chairman Jerome Powell and Bank of England Governor Andrew Bailey failed to provide further guidance. on the pace of future interest rate increases.

Oil prices were also little changed this morning as the latest OPEC ministers’ meeting looks set to conclude with little prospect of increased production quotas to ease price pressure. Brent is up about 50% year-to-date at $116 a barrel.

As interest rates and recession fears rise, the downward move in cryptocurrencies has continued, with Bitcoin trading today below $20,000.

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