London midday: Stocks fall further amid growth worries

(Sharecast News) - London stocks had extended losses by midday on Thursday, having taken their cue from a selloff on Wall Street, amid growing concerns about global growth. The FTSE 100 was 2.5% lower at 7,249.06. Overnight, the S&P 500 closed down 4%, while the tech-heavy Nasdaq ended 4.7% weaker, suffering their worst losses since June 2020.

Russ Mould, investment director at AJ Bell, said: "After the Walmart wobble on Tuesday, Target struck terror into the hearts of the US retail sector and was a big contributing factor behind the worst day for US markets since 2020 on Wednesday.

"The extent of the impact of inflation on these giants of American retailing has woken investors up, once again, to the huge impact surging prices are having on every facet of the economy.

"Combine this with hints from the US Federal Reserve about more aggressive interest rate hikes and it's little wonder that stagflation fears - a slowing economy combined with inflation running hot - are stalking the markets once more."

On home shores, the latest survey from the Confederation of British Industry showed that manufacturing output grew at its fastest pace in ten months over the quarter to May, but confidence fell further.

It was a sea of red in equity markets, with Kingfisher, Tesco, Unilever, PageGroup, Bunzl and GlaxoSmithKline all lower as they traded without entitlement to the dividend.

Royal Mail was under the cosh as it warned of price increases and £350m in cost cuts to combat soaring inflation after reporting a rise in full-year profits.

Auction Technology reversed earlier gains despite lifting its full-year revenue growth guidance following a better-than-expected first half.

Budget airline easyJet also gave up earlier gains to trade lower, after saying it expects third-quarter capacity to be 90% of pre-pandemic levels and that it had narrowed half-year loses.

Emergency home repairs group HomeServe was a bright spot, however, surging to the top of the FTSE 250 after agreeing to be bought by Canada's Brookfield Asset Management in a £4.1bn deal.

Market Movers

FTSE 100 (UKX) 7,249.06 -2.54% FTSE 250 (MCX) 19,441.88 -2.54% techMARK (TASX) 4,225.22 -2.01%

FTSE 100 - Risers

Fresnillo (FRES) 751.60p 0.54% Hikma Pharmaceuticals (HIK) 1,687.00p 0.51% Dechra Pharmaceuticals (DPH) 3,272.00p 0.25% Aviva (AV.) 413.70p -0.07% Severn Trent (SVT) 3,129.00p -0.26% Ocado Group (OCDO) 725.40p -0.33% Meggitt (MGGT) 775.20p -0.36% Burberry Group (BRBY) 1,577.50p -0.41% United Utilities Group (UU.) 1,139.50p -0.44% Imperial Brands (IMB) 1,847.50p -0.51%

FTSE 100 - Fallers

Royal Mail (RMG) 296.70p -13.35% 3i Group (III) 1,206.00p -8.91% Bunzl (BNZL) 2,750.00p -5.79% Diageo (DGE) 3,554.50p -5.49% DCC (CDI) (DCC) 5,730.00p -5.29% Intermediate Capital Group (ICP) 1,359.00p -5.06% Tesco (TSCO) 252.70p -5.04% Scottish Mortgage Inv Trust (SMT) 739.40p -5.01% Unilever (ULVR) 3,446.00p -4.96% Kingfisher (KGF) 241.50p -4.73%

FTSE 250 - Risers

Homeserve (HSV) 1,159.00p 10.07% Diversified Energy Company (DEC) 119.70p 1.61% Euromoney Institutional Investor (ERM) 1,048.00p 1.16% Oxford Biomedica (OXB) 493.00p 1.13% Mediclinic International (MDC) 352.20p 0.17% Pets at Home Group (PETS) 278.40p 0.14% BH Macro Ltd. GBP Shares (BHMG) 4,280.00p 0.00% Evraz (EVR) 80.89p 0.00% FDM Group (Holdings) (FDM) 955.00p -0.21% NCC Group (NCC) 208.50p -0.24%

FTSE 250 - Fallers

Chrysalis Investments Limited NPV (CHRY) 118.00p -9.23% Pagegroup (PAGE) 450.00p -7.56% Tyman (TYMN) 258.00p -6.86% QinetiQ Group (QQ.) 341.00p -6.68% Investec (INVP) 430.60p -6.57% Baillie Gifford US Growth Trust (USA) 147.80p -6.46% Syncona Limited NPV (SYNC) 171.00p -6.15% AJ Bell (AJB) 251.00p -6.13% Petershill Partners (PHLL) 218.00p -6.03% Ninety One (N91) 216.20p -6.00%