We’ll see this week how the FTSE 350 settles down to last week’s mini-budget and the latest interest rate hike.
UK stock market
New chancellor Kwasi Kwarteng’s tax cuts have shaken the markets. They’ve shaken the pound, too, and it’s fallen to a 37-year low.
On Friday, the FTSE 100 fell 141 points (2%), to end the week at 7,019. During the day, it briefly dipped below the 7,000 level. A similar percentage drop took the FTSE 350 down 78 points to 3,882.
Traders are expecting a volatile day Monday, and it’s anyone’s guess where the FTSE 350 might go on the day and through the week. Not that daily movements mean much to long-term investors, though. Except maybe short-term bargain buys.
US stocks also had a tough day Friday. The S&P ended 1.7% down on the day, on 3,693 points. The Nasdaq dipped another 1.8% to finish below 11,000 on 10,868 points. If UK shares have a tough morning, US stocks might follow them later in the day.
Monday is a quiet day as far as company news goes. But Legal & General shareholders will have first-half dividend cash coming their way. The insurance firm lifted its interim payment by 5% to 5.44p per share, and analysts are forecasting a full-year yield of close to 8%.
It’s interim dividend payment date from private equity firm Bridgepoint Group too, at 4p per share. Since IPO in July 2021, Bridgepoint shares have fallen 55%.
With little happening on the company front Monday, investors’ eyes will be cast to the week ahead.
We should have interim figures from boohoo Wednesday, and Next on Thursday. Boohoo shares have been struggling, dropping nearly 85% over the past 12 months, so any sign of uptick would be welcome there. Analysts are expecting earnings to grow over the next couple of years, but it looks like the market might take some convincing yet.
Interim results from troubled cinema chain Cineworld are due on Friday. The actual results, though, are likely to be overshadowed by any update on the possibility of a company rescue.
We await a few economic updates during the week. Right now, analysts are warning that the UK’s credit rating could be negatively affected next month by the tax cuts from the mini budget and the falling pound. And they’re urging the Bank of England to intervene.