We’re following on from a mixed week on international stock markets, with the FTSE 350 declining gently.
Stock market weakness
The FTSE 100 ended the week down 114 points (1.6%) at 7,237, after a dip on Friday. The UK’s August inflation figures came in less severe than feared at 9.9%, and that provided a bit of support.
The same percentage drop took the FTSE 350 down 66 to finish the week at 4011 points. All eyes this week will probably be on Thursday’s interest rates announcement.
US shareholders had a tougher week, as inflation in August was higher than expected. The S&P 500 ended the week with a hefty 4.1% fall. The Nasdaq, loaded with high tech stocks, fell an even bigger 4.8%. US stock markets do tend to be more volatile in response to short-term news than UK markets.
On the FTSE 100, a first-half report from Kingfisher is due. It should update us on how B&Q and Screwfix are coping with the economic squeeze. The company is currently on a £300m share repurchase spree, so cash appears plentiful so far.
It also suggests the board thinks Kingfisher shares are undervalued. And they have fallen 33% over the past 12 months. Analysts are forecasting a dividend yield approaching 5% for the full year.
We’re well into first-half dividend payment season, and a number of companies should be sending out their interim cash on Tuesday.
They include FTSE 100 companies London Stock Exchange Group, Hikma Pharmaceuticals and Pearson.
Quilter, Capital & Counties Properties, Scottish American Investment Company and Hiscox in the FTSE 250 will also be making their H1 payments.
Galliford Try will report on its full year on Wednesday. It’s outside the FTSE 350, but it should give us some feedback on the construction sector.
A trading update from Investec due Thursday could be interesting. After a strong pandemic recovery, the shares are up 35% over the past 12 months. But since April, they’ve been on a bit of a slide.
The biggest economic news of the week should be here on Thursday, with the Bank of England’s next interest rates decision due.
Oil price falling
The Brent Crude price remained fairly steady last week, ending at $91 per barrel. But it has been falling overall since peaking in June. Investors will presumably be looking to see if that longer-term trend continues this week.