Tech-heavy Scottish Mortgage Investment Trust was beaten up as investors feared portfolio company valuations would be worth less based on discounted cash flow models because of rising interest rates. Once seen as a superstar vehicle for the world’s next big things in the world of business, Scottish Mortgage has lost its shine big time. Its share price is down 43% year-to-date and has more than halved in value since last November’s peak.
Another stock that’s gone from hero to halfway to zero is JD Sports, whose share price is down 44% so far this year. In recent years the company had been rated at the top of its game, with must-have trainers and smart stores that encourage customers to keep coming back for more.
“Sentiment towards JD has soured this year due to worries about consumer spending. JD’s latest trading update implies it is holding up well in a difficult market, but that wasn’t enough to win over investors, with the share price only nudging up 2% on the news,” said AJ Bell’s Russ Mould.
“Another stock struggling to get a break is Rolls-Royce whose shares refused to budge despite a reassuring trading update. Ongoing recovery in the aviation sector and better prospects for defence services would normally be a reason to celebrate yet Rolls-Royce is fighting a weak market where investor sentiment is poor. It would take a barrage of good news to trigger a strong share price rise in the current environment.
“The FTSE 100 bade farewell to plumbing supplies group Ferguson which has now switched its primary stock market listing to the US. The change in listing category for the UK means it no longer qualifies for the FTSE indices and so the blue-chip index loses yet another long-standing name.”