MARKET REPORT: Bruised FTSE 250 suffers worst week in 18 months

Collapsing confidence in the economy condemned the FTSE 250 to its worst week in more than a year.

With around 40 per cent of its sales made domestically, the mid-cap index is vulnerable to the weakening of the pound and growing concerns about the UK’s growth prospects and fiscal credibility.

A fall of 1.4 per cent, or 271.2 points, to 19733.94 yesterday left the FTSE 250 at its lowest level since April, down 4.2 per cent for the week, its biggest loss since June 2023.

Simon French, chief economist at investment bank Panmure Liberum, said: “It is a damning verdict on the October budget, which failed to sell the UK as a destination for investment and growth.”

Earlier this week, data from global fund network Calastone showed investors withdrew £9.6bn from UK-focused equity funds in 2024, in its worst year on record. By contrast, the pound’s woes limited losses in the FTSE 100, which makes around four-fifths of its profits overseas.

Despite a drop of 0.9 per cent, or 71.2 points, to 8,248.49 yesterday, London’s leading index is up 0.3 per cent over the past five days.

UK markets remained in thrall to Wall Street, where a closely watched report showed the US economy added 256,000 jobs in December, much more than expected.

US stocks shook, gold rose further and Treasuries pushed bond yields higher, as markets bet that renewed inflation concerns would lead the Federal Reserve to cut US interest rates. more slowly this year, if at all.

Rising energy prices also threatened to fuel inflation. Hungry Chinese demand, dwindling U.S. stockpiles and a report of tougher sanctions against Russia pushed crude to its highest level since October. Good news for oil stocks as Hunting, which supplies equipment to the energy sector, rose 0.2 per cent, or 0.5p, to 306.5p.

Not so for airlines that consume a lot of gasoline. Wizz Air fell 7.6 per cent, or 101 pence, to 1,229 pence.

Meanwhile, investors examined the company’s latest batch of updates. They were the usual mix.

Clarkson jumped 9.9 per cent, or 385p, to 4,275p in its best day since August after the £1.3bn delivery services company said a 2024 profit of at least £115m It would be a little above expectations. And at Aim, further positive drilling results from its Segilola gold mine in Nigeria boosted Thor Explorations by 1.4 per cent, or 0.25p, to 18p.

But shares in energy services company Enteq Technologies lost three quarters of their value, plunging 75.2 per cent, or 2.33 pence, to 0.77 pence, after it said it could run out of cash before what was expected.

Vodafone fell 0.5 per cent, or 0.36p, to 66.18p after selling its remaining stake in Indus Towers, India’s largest mobile tower installation company, for around £270m. . Part of the proceeds were used to increase the telecom giant’s stake in Vodafone Idea, another Indian telecom company, from 22.6 percent to 24.4 percent.

Among retailers, Mike Ashley’s retail giant Frasers Group raised its stake in Marks Electrical Group to above 7.8 per cent. Frasers fell 0.9 per cent, or 5p, to 581p and Marks was unchanged at 53p.