Stocks in London closed lower on Friday, in a tough week for global equities, as recent US economic data stokes fears for the health of the world’s largest economy.
The FTSE 100 index fell 60.24 points, or 0.7%, at 8,181.47. The FTSE 250 lost 268.50 points, or 1.3%, at 20,494.00, and the AIM All-Share plunged 15.12 points, or 2.0%, at 744.00.
For the week, the FTSE 100 fell 2.3%, the FTSE 250 fell 2.8% and the AIM lost 3.7%.
The Cboe UK 100 fell 1.0% to 817.18, the Cboe UK 250 slumped 1.5% at 18,045.24, and the Cboe Small Companies ended down 0.3% at 16,848.22.
In European equities on Friday, the CAC 40 in Paris gave back 1.1%, while the DAX 40 in Frankfurt fell 1.5%.
The pound was quoted at $1.3147 late on Friday afternoon in London, down compared to $1.3160 at the equities close on Thursday. The euro stood at $1.1104, against $1.1082. Against the yen, the dollar was trading at JP¥142.12, down compared to JP¥143.94.
In New York, the Dow Jones Industrial Average was down 0.9%, the S&P 500 shed 1.5% and the Nasdaq Composite plunged 2.3%.
Total nonfarm payroll employment in the US rose by 142,000 in August, with job gains in construction and healthcare. In July, nonfarm payrolls rose by 89,000, the outcome revised from an initially reported 114,000 increase.
The latest reading missed the FXStreet-cited market consensus of a 160,000 increase in jobs.
Dutch bank ING believes the data has not settled the debate between a 25 and 50 basis point cut by the Fed later this month.
‘The US added fewer jobs than expected in August, but there was enough in the report to keep markets guessing on whether the Fed will cut by 25bp or 50bp on 18 September. Lead indicators suggest further weakness lies ahead, and we believe the Fed will go for a 50bp move, but it’s a close call,’ ING analysts commented.
‘We have a 50bp in our forecast, but it is a low conviction call made on the basis that inflation fears have receded and the Fed will want to get ahead of labour market weakness, which we think will become increasingly apparent in the months ahead.’
Weakness in London’s FTSE 100 was largely broad-based following the US data. Miners struggled, with Anglo American among the worst of the lot, falling 3.7%.
Lenders declined, NatWest gave back 2.8% and Barclays 2.6%.
Oil majors also struggled as Brent prices eased. Shell fell 2.3% and BP slipped 1.5%.
Brent oil was quoted at $71.50 a barrel at the time of the London equities close on Friday, slumping from $73.01 late Thursday. Gold rose to $2,514.36 an ounce against $2,505.80.
Elsewhere, Next 15 plunged 48% as investors fretted over the loss of a key contract.
The public relations agencies company said that a contract with Mach49’s largest customer has not been renewed after its initial three-year term and will now end this year. This contract had been expected to contribute just over £80 million of revenue in financial 2026, which means forecasts for that year will need to be adjusted.
Additionally, the group has continued to see ‘an ongoing weakness in spend’ from its technology customers, as well as a reduction in revenues from its public sector clients. As a result of these factors and the contract ending which will impact the last month of the fiscal year, Next 15 now believes financial 2025 revenue will be lower than planned, and profits to be materially below management expectations.
‘It is always dangerous if a business is reliant on a single client or contract for a big chunk of its revenue and shareholders in Next 15 have had a painful reminder of that fact this morning. The digital communications and media firm’s loss of a major contract for its Mach49 consulting business is a significant blow. Rough calculations suggest it will result in a 12% hit to consensus forecast revenue for the January 2026 financial year,’ AJ Bell analyst Russ Mould commented.
The current year is also expected to face an impact and worryingly other parts of the business are finding life difficult too. The group will need to find a way of giving the market some reassurance when it announces its first-half results later this month.
Digital 9 slumped 10% as it warned on its portfolio’s valuation as a review continues. The investor in internet infrastructure, such as data centres and subsea fibre expects its valuation as at June 30 to be ‘materially below’ what it published for December 31.
It predicted a provisional net asset value of 45p per share at June 30, down from 79.3p on December 31.
‘A major part of the NAV reduction is attributable to a re-assessment of the assumptions relating to the availability of finance for underlying portfolio companies and its impact on portfolio companies’ growth outcomes in the valuation models, as compared to those inputs used in arriving at the NAV as at 31 December 2023,’ Digital 9 added.
Monday’s local corporate calendar has a trading statement from cider maker C&C Group PLC and half-year results from building materials company SigmaRoc PLC.
The economic calendar has a Chinese inflation reading and Japanese gross domestic product data overnight.
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