London close: Investors 'sell the news' of easier Fed policy

(Sharecast News) - London stocks finished at their session lows on Thursday as investors took profits even after the head of the US Federal Reserve chairman made the case for allowing inflation hotter than up until now, meaning that interest rates were set to remain lower for longer.

By the end of trading, the FTSE 100 was down 0.75% at 5,999.99 while the pound was unchanged at 1.3209.

In his keynote speech at the Jackson Hole Economic Symposium, Jerome Powell, said the US central bank would look to offset shortfalls from its mandate for maximum employment by shifting towards so-called inflation averaging.

In reaction, IG senior market analyst, Joshua Mahony, told clients: "It seems to have been a case of buy-the-rumour, sell-the-fact for financial markets today [...]

"However, while longer-term easing from the Fed is a good thing for stocks, the decision to effectively raise the inflation target could ultimately weaken the hand of US consumers as their real wages are inflated away.

In equity markets, aircraft engine maker Rolls-Royce's shares slipped after saying it was selling its Spanish business as it sought to raise £2bn after reporting a large interim loss and scrapping its dividend due to the coronavirus pandemic. The company also announced the departure of chief financial officer Stephen Daintith.

Elsewhere, Homeserve was knocked lower by a downgrade to 'equalweight' at Morgan Stanley.

On the upside, WPP was at the top of the FTSE 100 despite saying it plunged to a £2.6bn first-half loss as revenue fell and the advertising company wrote down £2.7bn for the reduced value of its assets during the Covid-19 crisis.

Stock in Flutter Entertainment dipped after posting a 22% jump in pro-forma first-half revenues to £2.39bn for a 35% surge in earnings before interest, taxes, depreciation and amortisation to £684m.

OneSavings Bank and building materials supplier Grafton Group both rallied following first-half results.

Market Movers

FTSE 100 (UKX) 5,999.99 -0.75%
FTSE 250 (MCX) 17,762.03 0.05%
techMARK (TASX) 3,853.16 0.10%

FTSE 100 - Risers

WPP (WPP) 664.40p 6.47%
International Consolidated Airlines Group SA (CDI) (IAG) 216.00p 4.85%
Compass Group (CPG) 1,212.00p 4.48%
ITV (ITV) 61.58p 3.70%
Whitbread (WTB) 2,457.00p 2.55%
Informa (INF) 414.30p 2.30%
InterContinental Hotels Group (IHG) 4,449.00p 1.21%
Scottish Mortgage Inv Trust (SMT) 964.50p 1.21%
Smith & Nephew (SN.) 1,520.00p 1.16%
Coca-Cola HBC AG (CDI) (CCH) 2,009.00p 0.80%

FTSE 100 - Fallers

Homeserve (HSV) 1,293.00p -3.36%
Persimmon (PSN) 2,612.00p -2.90%
Johnson Matthey (JMAT) 2,374.00p -2.74%
CRH (CRH) 2,877.00p -2.57%
Anglo American (AAL) 1,803.80p -2.57%
Hargreaves Lansdown (HL.) 1,619.00p -2.44%
Antofagasta (ANTO) 1,065.00p -2.43%
Standard Life Aberdeen (SLA) 236.80p -2.35%
Evraz (EVR) 318.30p -2.30%
Ashtead Group (AHT) 2,635.00p -2.23%

FTSE 250 - Risers

OneSavings Bank (OSB) 301.40p 15.66%
Mitchells & Butlers (MAB) 169.00p 7.59%
Fisher (James) & Sons (FSJ) 1,232.00p 7.13%
PPHE Hotel Group Ltd (PPH) 1,120.00p 5.16%
Carnival (CCL) 1,019.00p 5.16%
Provident Financial (PFG) 245.20p 4.79%
SSP Group (SSPG) 240.40p 4.52%
Rank Group (RNK) 140.00p 4.43%
Wetherspoon (J.D.) (JDW) 1,010.00p 4.39%
Chemring Group (CHG) 241.50p 4.28%

FTSE 250 - Fallers

Sirius Real Estate Ltd. (SRE) 74.30p -4.25%
Ferrexpo (FXPO) 180.50p -4.04%
Bodycote (BOY) 557.50p -3.46%
Petrofac Ltd. (PFC) 158.45p -3.15%
Syncona Limited NPV (SYNC) 236.00p -3.08%
Capita (CPI) 31.04p -2.60%
Rotork (ROR) 302.00p -2.52%
Go-Ahead Group (GOG) 650.50p -2.40%
Ultra Electronics Holdings (ULE) 2,344.00p -2.33%
Bank of Georgia Group (BGEO) 904.00p -2.27%