(evening standard)
More signs that US policymakers are preparing an aggressive stance to fight inflation put pressure on European markets today.
The tech-led Nasdaq fell more than 2% last night and the FTSE 100 index is lower after Federal Reserve minutes pointed to a half-point hike in interest rates in May and a reduction in the central bank’s balance sheet.
Interest rates in the UK are also rising, but that hasn’t cooled the property market as Halifax today reported a 1.4% monthly rise in average house prices to £282,753.
FTSE 100 Live Thursday
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Shell threatens the exit from Russia with five billion US dollars
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US rate hike expectations weigh on London stocks
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Another big rise in real estate prices
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Marshall raises £187m for Marley’s umbrella deal
Shell faces a $5 billion hit in Russia
11:02, Oscar Williams-Grut
Shell faces up to $5 billion (£3.8 billion) in damage as it pulls out of Russia, the oil and gas giant has admitted today.
The company said it would require between $4 billion and $5 billion in impairment due to writedowns, credit losses and “onerous contracts.” The oil major said adjusted earnings would not be impacted.
Shell announced plans to abandon all joint ventures with Kremlin-controlled Gazprom shortly after invading Ukraine, putting the cost at $3 billion. Last month, she bowed to pressure to stop buying Russian oil and gas and announced plans to close gas stations in Russia and halt supplies of aviation fuel.
Read the full story.
FTSE 100 falls, Countryside stocks slide after warning
10:46, Graeme Evans
Property prices are still rising, but investors hoping builders will benefit remain frustrated by a difficult few months for the sector.
Valuations are weighed down by the interest rate outlook and the cost of refurbishing cladding, with homebuilders Vistry and Bellway both lower today after becoming the latest companies to commit to the government’s fire safety pledge.
Its share price declines were small compared to another big decline for urban regeneration firm Countryside Partnerships, which slipped 12% after it included a profit warning alongside the results of a review of its 128 operations.
The story goes on
Deputy boss John Martin said: “Management has identified a number of areas where we can improve our game and our team is moving quickly to improve performance.”
He said there remains significant market demand for the company’s homes, adding that large parts of the group continue to trade strongly.
The former Countryside chief left the company in January after a 50 percent drop in first-quarter earnings. Shares are down 32.4p today to 246.2p and are down 46% this year.
They led the Fallers Board in the FTSE 250 Index, which was 20.79 points down at 21,079.94. Other stocks on the back foot were paving company Marshalls after it raised £187m from investors at a 6% discount to last night’s close.
Proceeds will be used to fund entry into the roofing market after agreeing to buy Marley for £535million. Davy analysts called the deal both financially and strategically transformative, but shares were still down 41p to 651.5p.
The FTSE 100 Index fell 16.42 points to 7571.28, unhelped by rate hike expectations in the US and a number of stocks trading unclaimed for the latest dividend.
FTSE 100 lower, gaming firm 888 up 28%
09:01 , Graeme Evans
The FTSE 100 index is 18.25 points lower at 7569.45, unsupported by several blue chip stocks trading unclaimed for their latest dividend.
Ex-dividend stocks on the FTSE 100 Fallers Board include Aviva, Lloyds Banking Group, Abrdn and Mondi.
Ladbrokes’ games business, Entain, also fell 31.5p to 1590p, despite a first quarter update in which CEO Jette Nygaard-Andersen reported good performance across all businesses.
Among the biggest gainers in London’s top flight were Airtel Africa and Sainsbury’s, up 2%, while AstraZeneca continued its strong recent performance, up 1% to 10,606p.
The FTSE 250 index fell 16.33 points to 21,084.40, but 888 Holdings rose 28% after securing a reduced price for bookmaker William Hill’s UK assets.
Will rate hikes plunge the US into a recession?
08:25, Graeme Evans
Wall Street now sees a more than 80% chance that the Federal Reserve will hike rates by half a percentage point at its May meeting, the first time it has moved by that large an amount since 2000 .
UBS Global Wealth Management notes that futures markets are pointing to 220 basis points of rate hikes this year, on top of the quarter point hike in March.
However, the bank’s chief investment officer, Mark Haefele, doesn’t believe the rate hikes will plunge the US into a recession.
He said: “We expect the Fed to hike 50 basis points at each of the next two meetings. In addition, we believe there will be signs that inflation is slowing, which will allow the Fed to rise at a slower rate.
“Household balance sheets are strong and we are still seeing impetus from the end of Covid-19 related restrictions.”
The average house price rose 1.4% in March
07:56, Graeme Evans
Average house prices in the UK rose for the ninth straight month in March, with the 1.4% rise of £3,860 reported by Halifax today, the biggest rise since last September.
Annual house price inflation of 11% continues to hover around its highest level since mid-2007, taking the £282,753 average up by £28,113 year-on-year.
Halifax chief executive Russell Galley said: “The story behind such strong house price inflation remains unchanged: constrained supply and strong demand, despite the prospect of mounting pressures on household finances.”
Today’s figures show that the South West has overtaken Wales as the UK area with the strongest annual house price inflation at 14.6%.
The South East also saw a big increase with growth of 11.6% and an average price of £385,790. Prices in the region have risen by £40,177 in the last year, the first time an English region outside of London has seen an increase of over £40,000 in 12 months.
London continued its recent upward trend, with prices now up 5.9% year-on-year to an average price of £534,977.
US interest rate speculation hits growth stocks
07:45, Graeme Evans
Markets in Asia and Wall Street set the tone for a dovish session after discussions by the US Federal Reserve over tightening monetary policy unsettled traders.
Comment from last month’s meeting signaled a half-point hike in interest rates in May, along with a reduction in the central bank’s balance sheet by about $95 billion a month.
U.S. stocks fell sharply for the second consecutive month, with growth-oriented companies hit the hardest as Tesla’s Meta Platforms and Facebook owner both fell 4%.
Michael Hewson, Chief Markets Analyst at CMC Markets, said, “This is quite a turning point for the Federal Reserve, which just topped its balance sheet in March.”
He said a half-point hike in US interest rates now looks fairly certain, especially if next week’s inflation numbers show CPI inflation breaching the 8% mark.
The sell-off on Wall Street led to a poor session in Asia, where Tokyo’s Nikkei Index fell 1.5% after the IMF downgraded Japan’s GDP forecast to 2.4% from 3.3%.
CMC Markets expects the FTSE 100 Index to open 20 points lower at 7567.
Brent crude rose 3% to $103 a barrel after falling in recent days after major oil consuming nations agreed to release some of their strategic reserves.
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