London stocks experienced a downturn today, with defence companies facing a decline following an unsuccessful mutiny attempt in Russia. However, there was positive news for Aston Martin
as the luxury carmaker saw a surge in its shares after announcing a strategic supply agreement with Lucid, a U.S.-based electric vehicle manufacturer.
The FTSE 100, the UK's benchmark index, slipped 0.4%, hitting its lowest point in three months. The aerospace and defence sector took a hit, dropping 2.1%, as mercenaries from the Wagner group attempted a mutiny in Russia over the weekend. Christopher Peters, trading floor manager at Accendo Markets, noted that defence stocks often benefit from geopolitical tensions, but this incident had an adverse impact.
BAE Systems, the largest defence company in Britain, saw a significant decline of 3.1%, placing it at the bottom of the FTSE 100. The FTSE 250, which focuses more on domestic companies, also experienced a decline of 0.5% and reached a three-month low.
JP Morgan downgraded Lloyds, a major UK bank, to an "underweight" rating from "neutral," causing its shares to fall by 1.9%. The broader banking index declined by 1.1%.
In contrast, Aston Martin's shares jumped by 10.1% after announcing its partnership with Lucid Group to manufacture electric vehicles. This development provided a positive outlook for the luxury carmaker.
Industrial metal mining companies saw a 0.6% increase in their shares, reflecting higher copper prices.
As the quarter draws to a close, the FTSE 100, which is heavily influenced by exporters, is expected to report quarterly losses after two consecutive quarters of gains. This decline can be attributed to rising domestic inflation and ongoing interest rate hikes by the Bank of England, which have put pressure on the equity market.
Over the weekend, the Bank for International Settlements, the central bank umbrella body, emphasized the need for additional interest rate hikes, warning that the global economy is at a crucial juncture as countries grapple with inflationary pressures.
Among individual stocks, Cineworld Group faced a significant drop of 28.9% as the cinema chain operator announced plans to file for administration as part of a proposed restructuring strategy. Photo by Kaihsu Tai, Wikimedia commons.