FTSE 100 closes firmly in red as traders shun risk on both sides of the Atlantic

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The UK’s index of leading shares closed down almost 136 points, or 1.90%, at 7,017

  • FTSE 100 closes 1.9% down
  • Brussels Court rules in favour of  
  • US stocks plunge too

5.05pm: FTSE closes firmly in red 

FTSE 100 closed firmly in the red on Friday, while US stocks were also reeling, as investors fleed risk on both sides of the Atlantic.

The UK’s index of leading shares closed down almost 136 points, or 1.90%, at 7,017.

Over on Wall Street, the Dow Jones tanked over 383 points at 33,439, the S&P 500 dropped around 39 at 4,182 and the tech-laden Nasdaq lost over 108 points at 14,052.

Today is dubbed ‘Quadruple witching’ day – something, which happens on the third Friday of the month of every quarter, in March, June, September, and December.

It refers to the simultaneous expiry of single-stock options, single-stock futures, and stock-index options and stock-futures.

Chris Beauchamp, chief market analyst at trading group IG, said in a note: “Heavy losses in Europe and in the US are being influenced by options expiry but the second half of this week has taken on a distinctly ‘risk off’ feel, as investors seek to reassess a host of assumptions now that the Fed has changed its own working and outlook for the year for monetary policy.”

On Wednesday this week, the US central bank took many by surprise when it hinted that a rise in interest rates to curb inflation may come sooner than expected.

3.25pm: wins EU legal challenge over COVID-19 vaccine deliveries

The FTSE 100 stayed put ahead of close, plummeting 110 points to 7,042.

AstraZeneca PLC () said a Brussels Court has ruled in its favour in a legal challenge brought up by the European Commission regarding COVID-19 vaccine deliveries.

The FTSE 100 pharma giant has been criticised by the bloc after cutting supplies below the levels indicated by initial contracts.

But the judge ordered delivery of 80.2 million doses by 27 September, as the company has supplied more than 70mln to date.

The deal was to dispatch 300mln doses to the EU by the end of September 2021.

“All other measures sought by the European Commission have been dismissed, and in particular the Court found that the European Commission has no exclusivity or right of priority over all other contracting parties,” the company said in a release.

“The judgement also acknowledged that the difficulties experienced by AstraZeneca in this unprecedented situation had a substantial impact on the delay. AstraZeneca now looks forward to renewed collaboration with the European Commission to help combat the pandemic in Europe.”

Shares were flat at 8,383p on Friday afternoon.

2.50pm: Proactive North America headlines:

Naturally Splendid Enterprises Ltd () (OTCPINK:NSPDF) (FRA:50N) buys ‘state-of-the-art’ packaging line and issues shares to cancel debt

Esports Entertainment Group Inc () launches InVIE esports tournament series in South America

Ready Set Gold Corp () (OTCPINK:RDYFF) (FRA:0MZ) says will advance Northshore project with pending private placement of convertible debentures

Versus Systems Inc () () powers in-stadium engagement for Los Angeles Football Club as live events roar back

Plurilock Security Inc () (OTCQB:PLCKF) beats competition to win new order from California state taxation agency

Inc () (FRA:PFX1) announces new Therma-Fix Gen3 vacuum thermal desorption system to treat problematic waste streams

() (OTCMKTS:NHAWF) (FRA:VTJ1) starts till sampling program to identify kimberlite source at newly-staked CSI diamond project in Nunavut

2.45pm: Wall Street opens in the red

The main indices on Wall Street tumbled at the opening bell on Friday as investors were spooked by talk of interest rate hikes and worries about inflation.

In the early minutes of trading, the Dow Jones Industrial Average was down 1.11% at 33,448 while the S&P 500 dropped 0.86% to 4,185 and the Nasdaq fell 0.61% to 14,075.

While the market was broadly lower, an early winner was software firm Adobe Inc (), which jumped 1.8% to US$561.34 shortly after the opening bell following strong quarterly numbers reported after the close on Thursday.

Back in London, the FTSE 100 was continuing to sink lower, falling 112 points to 7,041 at around 2.45pm.

1.30pm: , BP dragged by lower oil prices

The FTSE 100 was even lower in the early afternoon and plummeted 107 points to 7,046.

Looking at its constituents, Plc ()() was down 4% to 1,363.6p and 3% to 1,414.5p for its class B and A shares respectively, while () shed 3% to 314.85p.

Oil prices are edging lower on Friday for a second straight session due to a strong US dollar following the Fed’s hawkish shift.

“The bullish trend in oil remains intact, thanks to optimism surrounding the demand outlook. The Dollar may well be strengthening but the fundamental picture for oil hasn’t changed,” said Sophie Griffiths, analyst at OANDA.  

“The supply/ demand equation continues to favour the demand side meaning that any sell off will likely be short lived. Taking a longer view on the oil market, rate hikes are a headwind, but a lot can change between now and 2023!”

“Meanwhile, the near-term demand outlook continues to improve with international travel restarting. The EU has added the US to its list of countries allowing non-essential travel.”

12.15pm: Wall Street to see mixed open

The FTSE 100 plunged deeper in the red at midday, down 79 points to 7,074.

Wall Street indices are also set for a subdued open, with the Dow Jones called 45 points lower at 33,649 and the S&P 500 4 points lower at 4,207.

The Nasdaq may offer some respite as futures are pointing at a green open, up 19 points to 14,176.

Declines in the former two indices highlight the ongoing concerns that rising inflation could soon curtail the expansive monetary policy mix around the world.

“Despite promises that central banks will remain accommodative, we are evidently moving towards a phase which will become increasingly dominated by attempting to quantify just how long we have left until the pendulum starts to swing back towards monetary tightening,” analysts at IG said.

“With Norway’s central bank laying out plans to start raising rates in September, we are evidently seeing growing confidence that the worst is behind us and thus normalisation will be required to avoid overheating.”

Thursday came with another rally for the US dollar overnight, with the index rising through its 200-DMA at 91.50 on its way to a close at 91.90, a 0.55% gain for the day.

“A less-dovish FOMC, foreign inflows into the US bond market, and a speculative market that was well short of US DOllars into the FOMC, should see the US Dollar rally continue into next week,” analysts at OANDA said.

11.15am: , Hays benefit from strong white-collar momentum, says Jefferies 

The Footsie continued its descent in late morning, plunging 66 points to 7,087.

PLC () and () got their earnings per share (EPS) upgraded by Jefferies over “increasing evidence that strong white-collar momentum has persisted”.

The figures for both recruiters were moved to the top of the range ahead of their second-quarter results in early July.

Analysts at the investment bank were 19% above the full-year consensus for Page and 8% for Hays, with ‘buy’ ratings for both companies, even though they are 10%-15% below 2019 peak revenue.

Hays dipped 1% to 164.90p while remained flat at 585p.

Jefferies said JOLTS data is too lagged to provide insight into current labour market trends, so it used weekly job advertisements from Indeed.com, as these have over 90% correlation with the temp industry volume growth.

Job search activity has yet to revive in the 25 US States, it said, as generous unemployment insurance has created a disincentive to participate in the labour market and some are hesitant to return to work due to COVID-19 risk.

“These are likely to be temporary headwinds because 25 states have brought forward cessation of programmes from…

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