Miners, tepid earnings forecasts drag UK equities lower
On Tuesday, Britain’s FTSE 100 benchmark lost early gains to slip, as mining shares saw a sell-off, and mid-cap equities suffered from disappointing earnings forecasts. The blue-chip FTSE 100 dipped by 0.2% by 9:24 GMT, while the mid-cap index FTSE 250 edged 0.4% lower.
Precious metals miners slipped by 0.8%, while industrial metals miners closely followed with a 0.9% fall as copper prices dipped ahead of money supply data from China, the top consumer, and US inflation numbers later in the week.
Retail Index Slumps
Industry data showed that British retailers reported tepid sales during Christmas, which may add to concerns regarding the slight recession. Consequently, the retailer’s index fell by 0.8%, with JD Sports shares declining 2.1%, and AO World down by 2.3%, among others.
However, oil and gas shares rose 0.5% as crude prices steadied after sliding nearly 3% in the previous session. BP led gains on the energy index with a 1% rise after Redburn Atlantic upgraded the stock to buy.
Automobiles and Parts Shares Gains
Automobiles and parts shares climbed by 0.9%, leading sectoral gains. The broader industrial support services index fell by 1.1%, leading sectoral declines.
Shares of Hays, the recruitment firm, fell by 11.7% after it forecast lower-than-expected first-half profit and stated that the short-term outlook would remain challenging due to a hiring slowdown. Victoria Scholar, Head of Investment at interactive investor, said, “The sluggish global growth backdrop combined with tighter monetary policy has dampened business appetite to pile on additional fixed staffing costs (for Hays).”
Investing in the UK Equities Market
Despite the sluggish market, the UK’s equity market remains attractive for investors seeking capital appreciation. Investing in the UK’s equities market can provide opportunities for long-term growth. Here are some of the reasons why:
UK companies listed on the London Stock Exchange are some of the most famous and successful worldwide, making the market more dynamic than other financial markets.
The UK has a thriving private equity and venture capital industry that makes it an interesting place to be for both entrepreneurs and investors.
Companies listed on the FTSE 100 have a total market capitalisation of over £1.7tn ($2.3tn), which means that there are many opportunities for investors who want to invest in the UK equities market.
Jupiter Fund Management and MJ Gleeson Stocks Slump
Jupiter Fund Management shares tumbled 13.1% to the bottom of FTSE 250 after the company flagged higher-than-expected 2023 net outflows and announced the exit of veteran portfolio manager Ben Whitmore this summer.
Furthermore, UK housebuilder MJ Gleeson lost 10.0%, posting its biggest one-day drop since March 2020 on lower home sales in the half-year to December 31.
Final Words
The UK equity market remains dynamic and offers opportunities for long-term growth despite recent market challenges. However, the slump in mining shares, tepid earnings forecasts, and a hiring slowdown contributed to the bearish performance of the UK equities market. Given its long-term growth potential, investors may still consider investing in the UK equities market.
Source: https://www.brecorder.com/news/40282801/miners-tepid-earnings-forecasts-drag-uk-equities-lower
