Home Business NewsBusiness FTSE 100 weighed down by US

FTSE 100 weighed down by US

by LLB Reporter
9th May 22 9:56 am

The optimism that followed the US Federal Reserve meeting last Wednesday feels a long way off on Monday morning as the FTSE 100 dropped to its lowest levels since mid-March.

The continuing impact of Beijing’s zero-Covid policy in China and concerns about the Fed’s next moves are helping to pile the pressure on markets.

“The impact of Chinese restrictions was reflected in export growth hitting two-year lows in April – in effect back where we were near the start of the pandemic,” says AJ Bell investment director Russ Mould.

“And investors are getting an unnerving reminder of the current geopolitical risks as Russian President Vladimir Putin leads anniversary celebrations in Moscow to mark the Soviet victory against the Nazis in the Second World War.

“This show of strength, as Russia displays its military arsenal, belies the weakness of the country’s position; isolated and stuck in a grinding conflict in Ukraine. However, it certainly sharpens focus on the wider threat the nuclear power can still pose.

“The market reaction to the departure of Rightmove chief executive Peter Brooks-Johnson demonstrated the esteem in which he has been held by investors as the shares fell on the news.

“He has been with the company since 2006, took charge in May 2017 and has led the company successfully through the disruption caused by the pandemic and the competitive threat posed by challengers like OnTheMarket and Zoopla.

“There may be some disappointment that there isn’t a ready-made replacement on hand, in the same way there was when Brooks-Johnson replaced Nick McKittrick five years ago.

“Whoever comes in next could face a tricky backdrop, with the property market looking increasingly challenged. Rightmove’s leading position should help and arguably its services might be even more crucial if estate agents have to work harder to generates sales.

“That said, much of its growth in recent years, bar the period when the housing sector went into a Covid-dictated deep freeze, has been driven by charging agents higher subscription fees. This could become increasingly difficult if the agents themselves are feeling the pinch.

“Talks between Shaftesbury and Capital & Counties over a merger look logical given both are focused on the West End and both have had to endure a big drop in tourist numbers and wider footfall in central London during Covid.

“Add in the fact that Capital & Counties already has a decent-sized stake in Shaftesbury and this looks like a marriage made in heaven.”

Leave a Comment

You may also like


Sign up to our daily news alerts

[ms-form id=1]