By Patrick Munnelly, Market Strategist, Tickmill
On Monday, the UK’s FTSE 100 saw a decline as investors anticipated interest rate decisions from both the U.S. Federal Reserve and the Bank of England (BoE).
The FTSE 100, which is composed of many export-oriented companies, slipped by 0.76%.
Market participants are closely monitoring the upcoming policy decisions from the Federal Reserve and the BoE, along with key domestic inflation data expected later in the week.
There is hope that these events could potentially signal the end of the current phase of monetary tightening.
Adding to the economic landscape, the UK’s primary manufacturing trade body lowered its growth forecast for the sector for the current year and the next.
This revision was attributed to a significant decline in factory output and ongoing economic uncertainty.
FTSE 100 biggest movers
Despite the overall market decline, on the positive side of the ledger Mondi Plc [LON:MNDI] saw a notable gain of 3.25% by the close.
The paper and packaging company reached an agreement to sell its largest plant in Russia to a unit of Sezar Group, a real estate development firm based in Moscow.
The transaction is valued at 80 billion roubles, equivalent to $825.7 million in cash.
Shares of Ocado Group [LON:OCDO], the British online supermarket, saw a significant surge, climbing as much as 7.3% before pulling back to close at 3.1%.
This gain propelled Ocado on to the leaderboard of London’s FTSE 100 index.
The rise in Ocado’s stock price came following a target price increase from 550p to 750p by brokerage firm, Jefferies. In addition to the target price adjustment, Jefferies also increased its medium-term core profit margin estimates for Ocado’s retail unit to a range of 7-8%. Furthermore, Jefferies raised its sales capacity per module forecast for Ocado’s tech solutions division to £73 million (equivalent to $90.4 million), up from the previous forecast of £70 million.
Including the gains witnessed during this trading session, Ocado’s stock has seen an approximate 32% increase year-to-date (YTD).
On the negative side of the ledger, UK housebuilder Persimmon [LON:PSN] found itself at the bottom of the FTSE today, falling 4.6% on reports that house sellers in the UK are reducing their asking prices at the quickest rate in over a decade.
This trend has emerged as high interest rates have subdued demand for property during the summer months.
According to property website Rightmove [LON:RMV], the proportion of homes on the market that have undergone at least one price reduction is currently at its highest level since January 2011.
This data reflects the challenges currently faced by the UK housing market as sellers adjust their pricing strategies in response to changing market conditions.