Thu, 15th Nov 2018
The FTSE 100 is on track for its poorest monthly performance in a decade. The UK’s leading index ended last week down by 1.4 percent, after a weak start on Wall Street hampered overall global sentiment.
British Shares fell to a two year low on Friday, as growing concern about earnings growth at some big companies held back the index. In particular, RBS and Rolls Royce put in poor performances.
Financials led the UK downwards, with a 21 point drop for the sector as a whole. Meanwhile, weak oil prices hit the energy sector. There was some strength among the mid-caps, with Just Group gaining eight percent thanks to regulators opting to delay the introduction of some new rules relating to equity-release mortgages. Overall, however, even the mid cap index was weak. Travis Perkins and Babcock suffered after yet more warnings came about rising costs in the building sector - this time from LafargeHolcim’s, the biggest cement maker in the world.
The last time the FTSE 100 was this weak in 2008, when the financial crisis was hitting banks and financial companies, and caused a downturn in optimism all over the world. This time, it is fears of a global trade war, combined with concerns about Brexit that are hitting the index hard. While there are some signs that the City will attract international investment post Brexit, questions about border controls, import and export delays, and staffing issues are leaving many investors feeling cautious.