The FTSE 100 index fell 105 points to 10,772.98 on Thursday. This drop was mainly due to ex-dividend adjustments and worries about U.S. inflation. The decline left London’s index out of sync with a positive start on Wall Street. The S&P 500 rose about 0.4%, while the Nasdaq Composite gained around 1%.
Key Details
Several companies, including Glencore, LondonMetric Property, and Croda International, traded without their latest dividends. Each of these stocks fell about 2%. This adjustment played a big role in the FTSE's decline. Additionally, July's personal consumption expenditures data showed a 3.7% rise in prices compared to last year. This number was higher than economists' expectations of 3.6%. The data raised concerns that U.S. interest rates could stay high for a longer time, affecting rate-sensitive sectors in London.
Despite the FTSE's struggles, Nvidia's strong earnings report helped boost the tech sector. The report showed a 106% year-on-year revenue increase to $96.2 billion. The company also announced plans to buy Hugging Face for $12.9 billion, lifting its stock by 6%. Market analyst Fawad Razaqzada said Nvidia's performance reassured investors amid worries about the AI trade's sustainability.
Background
The drop in the FTSE 100 could impact investor sentiment in rate-sensitive sectors like real estate and consumer goods. Higher U.S. rates may lead to increased borrowing costs. Investors will be watching for updates from the Jackson Hole economic symposium. Central bank leaders, including Fed Chair Kevin Warsh, are set to speak there.
Related coverage: FTSE 100 Rises as Consumer Confidence Reaches Two-Year High.
Based on reporting by: proactiveinvestors.co.uk