MARKET REPORT: The bruised FTSE 250 has its worst week in 18 months
Eroding confidence in the economy saw the FTSE 250 suffer its worst week in more than a year.
With around 40 percent of sales generated domestically, the midcap index is vulnerable to the weakening pound and growing concerns about growth prospects and the credibility of UK fiscal policy.
A drop yesterday of 1.4 percent, or 271.2 points, to 19733.94 left the FTSE 250 at its lowest since April, down 4.2 percent on the week, the biggest loss since June 2023 .
Simon French, chief economist at investment bank Panmure Liberum, said: ‘It is a damning assessment of the October budget, which failed to sell Britain as a destination for investment and growth.’
Earlier this week, data from global fund network Calastone showed investors withdrew £9.6 billion from UK share funds in 2024, the worst year on record. Conversely, the pound’s woes are limiting losses on the FTSE 100, which makes about four-fifths of its gains abroad.
Despite falling 0.9 percent, or 71.2 points, to 8,248.49 yesterday, London’s leading index is 0.3 percent higher in the past five days.
Downtrend: The FTSE 250 fell 4.2 percent this week, the biggest loss since June 2023
British markets continued to be captivated by Wall Street, where a closely watched report showed the US economy added 256,000 jobs in December, far more than expected.
U.S. stocks rallied, gold continued to rise and Treasury yields pushed even higher Treasury yields as markets expected renewed inflation concerns to prompt the Federal Reserve to cut U.S. interest rates more slowly or not at all this year .
More expensive energy also threatened to fuel inflation. Hungry Chinese demand, dwindling U.S. supplies and a report of tougher sanctions on Russia pushed crude to its highest level since October. Good news for oil shares: Hunting – which supplies equipment for the energy sector – rose 0.2 percent, or 0.5 pence, to 306.5 pence.
This does not apply to gas-guzzling airlines. Wizz Air fell 7.6 percent, or 101p, to 1229p.
Meanwhile, investors scrolled through the latest batch of company updates. They were the usual mixed bag.
Clarkson rose 9.9 per cent, or 385p, to 4275p on the best day since August, after the £1.3bn shipping company said 2024 profits of at least £115m would be slightly above expectations. And on Aim, further positive drilling results from Nigeria’s Segilola gold mine saw Thor Explorations rise 1.4 percent, or 0.25 cents, to 18 cents.
But shares in energy services company Enteq Technologies lost three-quarters of their value, falling 75.2 percent, or 2.33p, to 0.77p, after it said it could run out of cash sooner than expected.
Vodafone fell 0.5 percent, or 0.36p, to 66.18p after selling its remaining stake in Indus Towers, India’s largest mobile tower installation company, for about £270 million. Part of the proceeds were used to increase the telecom giant’s stake in Vodafone Idea, another Indian telecom company, from 22.6 percent to 24.4 percent.
Among retailers, Mike Ashley’s retail giant Frasers Group increased its stake in Marks Electrical Group to above 7.8 percent. Frasers fell 0.9 percent, or 5p, to 581p and Marks was unchanged at 53p.
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