Slight rebound for London markets as economic caution lingers

London’s main markets tentatively rebounded on Thursday despite continued concerns over the economic outlook.

Traders are still prepared for major rate hikes from the Federal Reserve and Bank of England but saw concerns cool briefly following significant drops in the previous two sessions.

Broadly robust jobless claims and retail figures in the US helped to keep sentiment steady.

The FTSE 100 ended the day up 4.77 points, or 0.07%, at 7,282.07.

Joshua Mahoney, senior market analyst at IG, said trading benefited from a “relatively healthy” set of data points as investors prepare for rate hikes.

He said: “The sharp selling pressure seen at the beginning of the week has eased somewhat as traders await the next major move lower in anticipation of a potential 100-basis point hike from the Fed.”

Michael Hewson, chief market analyst at CMC Markets UK, said: “It’s been a mixed and subdued session for markets in Europe today, with the FTSE 100 modestly outperforming due to some modest acquisition interest in the telecoms space, and outperformance from financials on the back of rising yields, with Lloyds, HSBC and NatWest all higher.”

Elsewhere in Europe, the German Dax declined 0.55% by the end of the session and the French Cac finished 1.04% lower.

Across the Atlantic, the major markets slipped back after Wednesday’s optimistic finish to trading after another fall in jobless claims.

Meanwhile, sterling slipped back despite an increase in 12-month inflation expectations.

The pound was down 0.18% against the dollar at 1.147 and was 0.09% lower against the euro at 1.148 at the close.

In company news, THG shares plunged after the online retail firm slashed its sales outlook for the current year as it said customers are feeling the pressure of rising living costs.

The company reported a drop in profit for the first half of the year, but worried investors even further with a major downgrade to its outlook for the year.

Shares slipped by 9p to 40p as a result, representing a roughly 95% fall since the firm floated almost two years ago.

Vodafone shares lifted after reports that private equity firms KKR and Global Infrastructure Partners are seeking to buy a stake in the Vantage Towers operation it spun off last year, and still holds an 82% stake in.

Vodafone was 2.12p higher at 109.24p while the Frankfurt-listed Vantage operation leapt by around 12% for the day.

Wickes has built significant gains after the DIY retailer and builders’ merchants said it was positive about consumer demand amid a surge in demand for home insulation. Shares finished 11p higher at 126.6p.

The price of oil took a step back once again over demand concerns, following warnings from the IEA that demand growth could slow to a halt in the fourth quarter of 2022.

Brent crude oil decreased by 3.58% to 90.73 US dollars (£79.07) per barrel when the London markets closed.

The biggest risers in the FTSE 100 were Scottish Mortgage Investment Trust, up 36.2p at 843.6p, Pershing Square, up 90p at 2,860p, Admiral, up 64p at 2,262p, Lloyds, up 1.16p at 47.62p and Rolls-Royce, up 1.7p at 76.86p.

The biggest fallers in the index were Dechra, down 190p at 3,088p, Tesco, down 13.3p at 232p, Howden Joinery, down 30.6p at 569.4p, Severn Trent, down 141p at 2,645p, and Bunzl, down 146p at 2,751p.