The UK stock market continued to retreat today as investors mulled over the latest announcement from the European Central Bank. As expected, the latter chose to maintain its current policy. However, a decision to slow down pandemic-related bond purchasing spooked some. This combined with lacklustre trading in the US and Asia yesterday and overnight and led to both the internationally-focused FTSE 100 and the more domestic FTSE 250 index closing down 1.03% and 0.21% respectively.
Let’s look a little closer at today’s best and worst-performing stocks, starting with the latter.
Today’s stock market losers…
In the FTSE 250, shares in animal genetics firm Genus were well out of favour. Despite the company revealing some very positive full-year numbers, investors didn’t like talk of a volatile pig market in China. Even the suggestion that this would be a “short term headwind” didn’t carry much weight. The Genus share price dropped 7.6%.
Budget airline easyJet was another heavy faller from the second tier, losing over 10% of its value by the close. This followed the announcement that the Luton-based business would be looking to raise £1.2bn from investors via a rights issue to boost its balance sheet. Also contributing to the tumble was news that the company had scorned a preliminary takeover approach. The identity of the potential buyer was not revealed but has since been rumoured to be peer Wizz Air. In today’s statement, easyJet said that it undervalued the business and the offer was unanimously rejected.
Perhaps by association, FTSE 100 airline IAG was in the red. That’s despite yesterday’s rumours that the controversial traffic light travel system adopted by the UK government will be overhauled. Elsewhere in the top tier, Coca Cola HBC shed 4.4% of its value. DCC and Melrose Industries grabbed second and third spots, down 3.4% and 3.2% respectively.
Morrisons slips as profits tumble
Back in the FTSE 250, takeover target supermarket Morrisons strayed into negative territory after revealing a 37% drop in profit over the six months to the beginning of August. The firm also announced a hit of £41m of Covid-19 costs and £80m in lost profit in sales from cafes, fuel and food-to-go. Despite reiterating previous guidance, it warned that rising costs in its supply chain could still impact near-term performance.
In other news, investors in online gambling firm 888 reacted negatively to the announcement that their company would be buying William Hill’s European business for £2.2bn. The deal would include 1,4000 physical shops. The former said that this purchase would give it “significantly enhanced exposure to sports betting“. But owners weren’t convinced. The shares slid by 3.3%.
On a day that lacked any massive gainers on the FTSE 100, investment firm M&G and hotel company Whitbread were in demand. Housebuilders Persimmon and Barratt Developments held their own too. Despite falling back at the close, luxury brand Burberry also continued its gradual recovery. Investors had been dumping the stock recently following weaker-than-expected retail sales figures in China. The market is of huge importance to the FTSE 100 constituent.
Higher gains, however, could be found in the FTSE 250. Intellectual property business developer IP Group headed the second tier leaderboard with a 6.1% rise. It was closely followed by residential landlord Grainger, which managed 3.8%. Despite today’s lacklustre performance, The FTSE 250 has still managed to return 15.8% year to date, far more than the 6.9% achieved by the FTSE 100.
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Paul Summers owns shares in Burberry. The Motley Fool UK has recommended Burberry, Melrose, Morrisons, and Wizz Air Holdings. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.