What happened in the stock market today

Jonathan Smith talks through the best and worst performers in the stock market today, along with explaining why the FTSE 100 finished lower.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

happy senior couple using a laptop in their living room to look at their financial budgets

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The FTSE 100 finished lower by 0.6% on Wednesday, with the stock market struggling to make gains due to negative sentiment and news of potentially higher tax rates. After falling heavily on open, the index was down over 1% by mid-morning. However, it did manage to rally back over the course of the rest of the day, before falling again as we headed towards the end of the day. 

The winners and losers

The main losers that dragged the stock market down today were homebuilders and property-related stocks. Taylor Wimpey, Persimmon, Barratt Developments, and Land Securities were all down over 2%.

This likely linked back to the overall sentiment of caution around the economic recovery here in the UK. The property market has performed exceptionally well over the past year. But with stamp duty holidays now over and recent economic data not as positive as some expected, the housing sector could come under pressure.

The main gainers in the stock market today were from a mix of areas. The top performer was B&M European Value Retail, with shares rallying almost 7%. This came after a positive trading update was released. In it, the company noted that “gross margins have been stronger than originally anticipated”. As a result, it has hiked its profit guidance for the rest of the year.

The second top gainer was Smiths Group. It saw its share price rise almost 3% thanks to confirmation of selling off a division to ICU Medical for $2.4bn. The medical division that it was looking to sell had others bids. Ultimately, this one that was chosen was clearly taken in a positive light by investors.

Negative sentiment weighing on the stock market

The overall index did finish in the red. One reason for the downbeat mood was the news that National Insurance contributions are set to rise. The money raised is expected to be able to give the NHS £36bn over a three-year period. 

There is also going to be an increase of 1.25% on the rate of dividend tax. Aside from the tax-free allowance (currently at £2,000 a year), this bump up in tax will impact investors across the board.

Regardless of political affiliation, higher taxes are usually taken as a negative by financial markets as it signals a tightening of fiscal policy. In a similar way, tightening monetary policy (such as higher interest rates) is also a negative for the stock market.

Added to this was concern about the economic recovery from Covid-19. This weighed not only on the stock market in the UK, but also around the world. For example, the German DAX closed down 1.3% and currently the US NASDAQ is down 0.8%.

Overall, today was a negative day for the stock market, but there were still some good stories to find within the FTSE 100 index.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

jonathansmith1 has no position in any share mentioned. The Motley Fool UK has recommended B&M European Value and British Land Co. 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.

More on Investing Articles

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »

Investing Articles

Are HSBC shares a FTSE bargain? Here’s what the charts say!

There are plenty of dirt-cheap FTSE 100 banking stocks for investors to choose from today. Our writer Royston Wild believes…

Read more »