FTSE 100 clings onto gains despite Reckitt shares hitting 11-year low

The UK’s top share index has clung onto gains as the latest interest rate decisions loom at home and across the pond.

London’s FTSE 100 moved 6.64 points higher on Monday, or 0.08%, to close at 8,292.35.

Earlier in the day, it was up by as much as 1% but was dragged lower by hefty losses for consumer goods group Reckitt Benckiser.

Reckitt saw its share price drop by 9%, hitting a new low of more than a decade.

It came after news from late Friday that a jury in the US ordered rival company Abbott Laboratories to pay 495 million US dollars (£385 million) in damages relating to the health impact of its premature baby formula.

It was the latest decision in a series of lawsuits against Abbott and Reckitt over their baby formulas, with Reckitt being ordered to pay 60 million US dollars (£47 million) in a similar case earlier this year.

Meanwhile, investors showed signs of cautious trading ahead of major economic events this week, with the US’s Federal Reserve and Bank of England setting interest rates on Wednesday and Thursday respectively.

Expectations that the UK’s central bank could opt for a rate cut have risen in recent weeks.

Chris Beauchamp, chief market analyst for IG, said: “Last week saw the FTSE 100 come storming back, as the index touched a three-month low and neared an almost two-month high in the space of 48 hours.

“UK investors, like everyone around the globe this week, will be trying to keep on top of the plethora of earnings and economic events, so it’s not surprising that the index has struggled to maintain momentum in Monday’s session.

“Index heavyweights like BP, shell and GSK report this week too, providing another reason for caution after the solid gains of Thursday and Friday.”

Elsewhere in Europe, France’s Cac 40 was down 0.98% and Germany’s Dax closed 0.53% lower.

Over in the US, the S&P 500 was up about 0.4% and Dow Jones up 0.1% by the time European markets closed.

The pound was down about 0.1% against the US dollar at 1.285, and up 0.2% against the euro at 1.188.

The price of Brent crude oil dropped 1.7% to about 80 US dollars per barrel.

In other company news, shares in gambling giant Entain dropped sharply on Monday after its US joint venture BetMGM said it expects to generate a loss for the full year.

The betting group, jointly owned by Entain and MGM Resorts International, reported an underlying loss of nearly £100 million for the first half of 2024.

The group said it was a “year of investment” and was expecting to be profitable in the coming years, Nevertheless, its share price closed 8.1% lower.

The biggest risers on the FTSE 100 were JD Sports, up 5.1p to 128.3p, Airtel Africa, up 3.2p to 113p, Natwest Group, up 9.5p to 371.4p, Segro, up 18.2p to 910.2p, and Prudential, up 11p to 696p.

The biggest fallers on the FTSE 100 were Reckitt, down 393p to 4,093p, Entain, down 52.4p to 596.6p, easyJet, down 9.2p to 454.4p, IAG, down 3.1p to 164.05p, and Anglo American, down 40.5p to 2,339.5p.