Tue. Sep 26th, 2023
    The FTSE and European Markets Mixed as UK Manufacturers Face Challenges

    The FTSE 100 and European markets saw a mixed start to the week, with the FTSE down 0.1% and the CAC falling 0.7%. Fresh data revealed that UK manufacturers are holding back investment and cutting hiring plans due to the challenging economic environment. A survey conducted by industry body Make UK showed that the majority of manufacturers feel that policy incentives in other major economies, such as the US Inflation Reduction Act and similar measures in Europe, are making UK investments harder to justify. Over half of the companies surveyed have withheld investment in the past two years despite having accessible investment capital.

    The uncertainty in the business environment has led to a decline in manufacturing investment and hiring plans, affecting the FTSE 250, which includes more domestically-linked stocks. The FTSE 250 fell 0.4% in early trade. This data highlights the need for policy improvements to stimulate investment and support the manufacturing sector.

    In other news, the upcoming Federal Reserve meeting is expected to result in a pause in rate hikes. The main question surrounding the meeting is whether policymakers see one more hike this year, as indicated by the dot plot. Any changes to the dot plot could impact market expectations of future rate hikes.

    In the FTSE 100, Moni, Ocado, and Ashtead were the top gainers, while Persimmon, WPP, CRH, and Johnson Matthey saw declines.

    Additionally, rental prices in the UK have surged by 12% compared to last year, reaching the highest level on record. This increase is driven by landlords responding to higher interest rates. The rising rents have implications for inflation and will be considered by the Bank of England in its decision-making process.

    Overnight in Asia, markets were mixed, with the Hang Seng in Hong Kong closing 1% lower due to concerns in the property sector. The SSE Composite in China saw a modest increase of 0.3%, while the Nikkei in Japan rose by 1.1%.

    Overall, it is a busy week for central banks, with policy meetings scheduled for the Federal Reserve and the Bank of Japan, among others. These meetings will have a significant impact on global markets and investor sentiment.

    – Make UK survey on UK manufacturers: [source not provided]
    – Federal Reserve meeting and dot plot analysis: Neil Wilson, Chief Market Analyst at Finalto
    – FTSE 100 top risers and fallers: [source not provided]
    – UK rental price increase data: Hamptons
    – Asian market performance: [source not provided]