The FTSE 100 suffered its six successive daily decline, as poor UK data, US interest rate worries and a familiar name in China property sector woe combining to send London’s large-cap index lower again.
The last time the blue-chip benchmark suffered six straight days in the red was in late-June. You would need to go all the way back to July 2019 for its last seven-day losing streak.
There was a bright spark away from the illustrious FTSE 100, with new AIM arrival Tan Delta Systems impressing on debut.
The FTSE 100 index fell 47.78 points, 0.7%, at 7,262.43. It has given back 3.5% this week.
The FTSE 250 shed 259.47 points, 1.4%, at 18,096.60, and the AIM All-Share fell 7.88 points, 1.1%, at 732.24.
For the week, the FTSE 250 has fallen 3.7% and the AIM All-Share has lost 3.2%.
The Cboe UK 100 ended down 0.6% at 724.28, the Cboe UK 250 slumped 1.3% to 15,902.53, although the Cboe Small Companies ended 0.9% lower at 13,476.66.
In European equities on Friday, the CAC 40 in Paris fell 0.4% and the DAX 40 in Frankfurt lost 0.7%.
In New York, the Dow Jones Industrial Average was 0.1% higher at the time of the European equities close. The S&P 500 was down 0.2%, while the Nasdaq Composite fell by a steeper 0.6%.
Hurting sentiment on Friday was more worrying news out of China. Property developer Evergrande Group filed for bankruptcy protection in the US on Thursday, court documents showed.
Chapter 15 bankruptcy protection enables a US court to intervene in cross-border insolvency cases involving foreign companies undergoing creditor-led restructuring, with the goal of safeguarding debtors’ assets and aiding troubled businesses.
Evergrande, once China’s top property developer, was found in 2021 to be struggling with more than $300 billion in liabilities.
The company’s woes have come to symbolise the growing crisis in China’s sprawling property sector, which accounts for a huge portion of the world’s second-largest economy, that many fear could spill over globally.
Evergrande’s bankruptcy filing comes after Country Garden, another Chinese property firm, missed bond payments and warned of multi-billion dollar losses at the weekend.
Rising US government bond yields have also hurt stock market appetite this week. The 10-year Treasury yield spiked to around 4.33%, its highest since October, and approaching levels not seen since 2007.
‘The continued surge in long-term Treasury yields to their highest level since before the financial crisis, as expectations of an economic re-acceleration have mounted, sets a fraught backdrop ahead of Fed Chair Jerome Powell’s speech at Jackson Hole next week.
‘But with little evidence that stronger growth will threaten to reignite inflationary pressures, we don’t think there is any need for Powell to dust off his hawkish script from last year’s event,’ Capital Economics analyst Andrew Hunter commented.
Completing the negative cocktail for equity markets on Friday, UK retail sales were worse than expected last month.
The Office for National Statistics said retail sales fell 3.2% annually in July, compared to a downwardly revised 1.6% fall in June. The market had been expecting a 2.1% fall for July, according to FXStreet-cited consensus.
June’s annual decline was first estimated at 1.0%.
The pound was quoted at $1.2736 late Friday in London, down from $1.2746 at the equities close on Thursday. The euro stood at $1.0876, up slightly against $1.0872. Against the yen, the dollar was trading at JP¥145.20, lower compared to JP¥146.06.
Typifying investor caution on Friday, British American Tobacco - seen as a defensive stock - was among the best FTSE 100 performers, rising 1.2%.
Retailers suffered a poor showing in the large-cap index, with Frasers down 2.4% and JD Sports losing 2.2%. Among the FTSE 250, Dunelm gave back 2.3%.
Defying the glum mood on Friday, Tan Delta Systems shares rose as it made its debut on AIM.
Sheffield, England-based Tan Delta makes sensors for equipment monitoring and data analysis. The sensors detect faults and help to optimise maintenance schedules, reducing the carbon footprint of equipment by reducing the oil and spare parts used, improving its efficiency, and extending its working life.
The stock closed at just around 29 pence, up roughly 12% from the 26p initial public offering price.
Also on the up, Beacon Energy jumped 47% after it found ‘good quality’ oil-bearing reservoirs in the Meletta-Schichten sandstone and the Pechelbronner-Schichten sandstones on the Schwarzbach-2(2.) well in Germany.
The Germany-focused upstream oil and gas company said initial evaluation of the logs by its subsidiary Rhein Petroleum over the Pechelbronner-Schichten indicated a 34 metre gross interval containing 28 metres of oil-bearing net reservoir.
Over in Amsterdam, eyes were on Adyen shares again. Despite tumbling almost 40% on Thursday, the stock failed to bounce at the end of the week, falling another 2.9%.
Adyen had said on Thursday that revenue in the first half of 2023 plummeted by 78% to €853.6 million from €3.95 billion a year prior. However, net revenue, which excludes costs incurred from financial institutions, increased 21% year-on-year to €739.1 million.
On the other hand its earnings before interest, tax, depreciation and amortisation fell 10% to €320.0 million, which Adyen put down to wage and salary increases.
Deutsche Bank is still bullish on the payments firm, however.
‘Adyen remains the most scalable and cost-efficient player in the market, and we expect further market share gains as the dust of this pricing war is settling. We hence see the near 40% drop in the share price as a good long-term buying opportunity,’ analysts at the German bank explained.
Brent oil was quoted at $84.21 a barrel in London on Friday, down from $84.68 late Thursday. Gold was quoted at $1,892.45 an ounce, slightly lower against $1,893.44.
Monday’s economic calendar has an interest rate decision from the People’s Bank of China, before a German producer price reading at 0700 BST.
The local corporate calendar has half-year results from miner Thungela Resources.
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