FTSE 100 Live: Index higher as Nikkei rebounds 10% Thames Water fined
The Nikkei 225 bounced back today, influencing a more relaxed trading session in European markets.
Japan's top stock index rose by 10% after experiencing its most severe drop since 1987 on Monday.
London traders shifted their attention back to company profits, particularly the numbers from Travis Perkins.
Blue-chip Stocks Bounce Back, FTSE 250 Rises 1.2%
The FTSE 100 index has risen by 0.5%, or 39.41 points, reaching 8047.64. This comes after a 2% drop during the recent global stock market crisis.
Rolls-Royce and Melrose Industries were among the top-performing stocks, with Rolls-Royce rising by 2% or 10.6p to 454.4p and Melrose Industries gaining 16.5p to 468.4p.
The FTSE 250 index went up by 1.2%, gaining 248.66 points to reach 20,485.40.
Is Market Slump An Overreaction?
According to Chris Beauchamp, who is the chief market analyst at IG, the Nikkei 225 recently experienced its largest loss since 1987 but then saw its largest intraday surge to date.
He continued by saying that the drop in market prices from the day before seemed excessive, especially in the Japanese markets.
The sudden increase in the VIX on Monday was similar to the levels seen during the global crises of 2008 and 2020. However, this time it was caused by the unraveling of the yen carry trade and a sense of fear surrounding growth in the US markets.
The Federal Reserve made the correct decision to not consider an emergency decrease in interest rates, and the decrease in the value of technology stocks has helped to reduce some of the excitement that we witnessed in June and July.
"Abrdn Fund Outflows: £1B Impact On Revenue"
Withdrawal of funds totaling £1 billion at the financial management company Abrdn based in the City caused a decrease in revenue during the first half of the year for the firm listed on the FTSE 250.
The company's total earnings decreased by 7% to £667 million. Net withdrawals amounted to £1 billion, compared to £6.5 billion in the previous year. The decrease in funds from stocks and diversified portfolio investments, as well as from the insurance partners department, was balanced out by increases in money markets, bonds, and quantitative investments.
The company is currently implementing a cost-saving plan of £150 that will result in approximately 500 layoffs.
Jason Windsor, acting CEO, stated:
During the beginning of the year, we have started off well by improving our processes and strengthening our offers to set the stage for future expansion.
Nikkei 225 Rebuilding Post Worst Session 1987
The Nikkei 225 index in Japan bounced back, ending the day 10.2% higher at 34,675 after a steep loss of over 12% on Monday.
The largest drop since 1987 occurred yesterday, caused by unexpected increases in the yen, leading to widespread selling in markets worldwide.
The Nikkei reached an all-time high of 42,224 in the middle of July and has increased by 4% so far this year.
Other markets in Asia have been quiet, with both the Hang Seng index and Shanghai Composite seeing minimal movement today.
The futures market is indicating that the FTSE 100 index is up by over 1% at 8101.
Travis Perkins Reports 65% Drop In Profits Due To Weak Demand
The construction supply company Travis Perkins stated that there is still low demand for their products, as they announced a 65% decrease in operating profit for the first half of the year to £38 million.
Income decreased by 4.4% to £2.4 billion, as described by the company as a continued pattern seen in the second half of the previous year, with low demand in all areas of the market the company operates in.
The current CEO, Nick Roberts, who is leaving soon, stated:
The trading environment has been tough in the first six months of the year. We are focused on meeting our customers' needs while also understanding that the lower volume of trading requires us to operate a more streamlined and efficient business.
The £1.9 billion company will be welcoming a new CEO, Pete Redfern, in September and a new chair, Geoff Drabble, in October.
Travis, the owner of the Toolstation brand, has been affected by the housing market slowdown and the resulting decrease in demand.
Today, it was mentioned that the company reduced its expenses by £19 million and is on schedule to close its Toolstation France branch by the end of this year.
Thames Water Fined $104M
Thames Water has been given a penalty of £104 million for not managing their water treatment facilities and storm overflows properly. This is one of the largest fines ever given by Ofwat.
The organization stated that the water company in London did not properly prevent the release of untreated sewage during storms, causing damage to both the environment and customers.
In addition, two more companies were penalized. Yorkshire Water received a fine of £47 million, while Northumbrian Water was handed a penalty of £17 million.
Ofwat's top boss, David Black, stated that Thames Water, Yorkshire Water, and Northumbrian Water have all been found guilty of not properly managing their sewage facilities, which led to too many spills from storm overflows. Their negligence caused sewage to be regularly released into our rivers and oceans, instead of only in rare situations as required by law.
The amount of fines we plan to impose shows how serious the problems are and our commitment to ensuring water companies work harder to improve the cleanliness of rivers and oceans.
Fear Index Drops After Monday Surge, Nvidia Shares Fall 6%
The Vix fear index dropped to 38.57, down from 65.73 during yesterday's chaotic stock market trading, when it surged by 42.34 points or 181%.
Today, Deutsche Bank highlighted that the biggest single-day change since the index began in 1990 was a 21.57 point rise during the start of the Covid pandemic in March 2020.
Even amidst the worldwide economic downturn, the largest spike was 15.18 points to reach 38.57. The bank noted that the severity of the fluctuations throughout the day is indicative of the significant growth in short-term options trading in recent years.
In the US stock markets, the S&P 500 started trading with a drop of over 4% while the Nasdaq was down by 6%. However, by the end of the trading day, the declines had decreased to around 3%. Despite this improvement, Nvidia shares remained 6% lower and Apple was down by 5%.
FTSE 100 Rises As Nikkei 225 Rebounds
The FTSE 100 index is expected to start 1% higher today after a steep drop in global stock markets yesterday led to London's main stock index falling by 2%.
Today, the Nikkei 225 is expected to bounce back after experiencing its worst performance since 1987 on Monday. The index saw a significant increase of over 10% following the previous day's steep decline.
Yesterday, the S&P 500 index and Nasdaq experienced a 3% decrease on Wall Street. However, futures trading indicates that there may be a rebound during today's session.
Recap: Recession Fears Led To Bad Trading
Hello from the Standard City department.
The FTSE 100 had a really bad day this year because people all over the world were selling their stocks due to worries about a possible recession in the US. Japan's Nikkei 225 index also had a terrible day, the worst since 1987, when investors got scared by the disappointing job numbers from the US last week.
London's primary financial markets started the day with a significant drop and remained in negative territory for the rest of the day, with international companies showing particular weakness.
The main stock market in London ended the day with a decrease of 166.48 points, or 2.04%, closing at 8,008.23. This is the lowest closing price since April.
Worries about a possible economic downturn increased on Friday when it was reported that the US workforce only grew by 114,000 jobs, falling short of experts' expectations of 175,000. Additionally, data from June was adjusted downward, adding to concerns about the state of the economy.
The rate of people without jobs reached a high point of 4.3% in three years, which was higher than the predicted 4.1%. This number may have been affected by the disruptions caused by hurricanes.
The numbers caused a big increase in wagers on Federal Reserve lowering interest rates. Traders now expect a 2% reduction in rates within the next year.
According to Jim Reid, a strategist at Deutsche Bank, the markets were already nervous before Friday, but a low payrolls number has intensified a major movement worldwide.
