The FTSE 350 had a rocky start to the week Monday, and faces huge uncertainty Tuesday.
Shares and sterling
As a result of last Friday’s mini-budget, the pound fell to its lowest level against the US dollar ever. Market uncertainty over how the new UK government will perform was thrown into further doubt as chancellor Kwasi Kwarteng promised further, unfunded, tax cuts to come.
The FTSE 100 fell below 7,000 points again, but recovered to close the day just 2 points up at 7,021.
The FTSE 350 also regained lost ground in the afternoon, but finished 7 points down at 3,875.
US stocks had a steady day, but that might not continue Tuesday depending on what happens to the UK and European markets.
The S&P 500 lost 1% to end Monday at 3,655 points. And the Nasdaq fell 0.6% to end at 10,803 points.
Bank of England
The plummeting pound sparked rumours of an urgent meeting at the Bank of England (BoE), to decide on an emergency interest rate rise. Speculation suggested it might be as high as a full 1%, to ease the collapse of confidence in sterling.
Late in the day Monday, the BoE said there’d be no emergency decision. But it did say it will do whatever’s needed when the Monetary Policy Committee next meets in November.
That largely left commentators unsatisfied. So investors will presumably be waiting on any new statements that might come Tuesday.
We should have first-half results from AG Barr on Tuesday. The soft drinks maker is outside the FTSE 350, but with a market cap of £557m it’s bigger than the current bottom few.
Revenue is expected to come in at approximately £157m. That’s about 16% ahead of last year, and 19% ahead on a like-for-like basis.
The AG Barr share price has fallen a modest 6% over the past 12 months, mostly since the summer when inflation really started to bite.
A couple of FTSE 350 companies will be paying their interim dividends on Tuesday.
Insurer Prudential will pay its first interim dividend of the year, of 5.74 US cents per share. Any conversion into sterling would probably be out of date before the end of the sentence. Analysts expect a full-year dividend yield of around 1.7%.
Investment manager Abrdn is paying 7.3p per share, unchanged from the first half last year despite a weaker performance. An unchanged full-year dividend would yield 10.7% on the current share price.