London shares plummeted on Tuesday, with the stock market trading in bearish territory. The decline was driven by mixed corporate earnings and concerns about upcoming interest rate decisions.

The US and UK central banks will announce their decisions soon. They typically cut rates when inflation is soaring, with the goal to hinder its rise. However, such tightening always has an impact on the broader markets.

FTSE 100 News: A 0.4% Drop

On Tuesday, the FTSE 100 index opened the session lower by 0.4%. Before declining, it skyrocketed to its highest peak since early July yesterday. On the other hand, the mid-cap FTSE 250 index started trading lower by 0.1%.

According to the London Stock Exchange, FTSE 100 is currently trading at 8,262.29. It shaved off 0.36% thus far in this session. Meanwhile, FTSE 250 stands at 21,417.76. It defied the market trend by soaring by 0.78% today. Other indexes traded in the red, though.

The beverages sector suffered the most, plummeting by 6.8%. It hit its lowest level since November 2020.

At the same time, Diageo tumbled down by 8.1%, hitting the bottom of the FTSE 100. The strong spirits maker’s annual organic operating profit dropped by 4.8%. This figure is much lower than analysts predicted. Consequently, the index suffered.

Some of the indexes managed to gain, though. For example, energy shares soared. They added 0.6% today overall, with major player BP adding 1.9%. The stock reported that its second-quarter profit came higher than analysts’ expectations. Consequently, it increased its dividend and the share price jumped as well.

According to the London Stock Exchange news today, precious metal miners also rallied. It traded higher by 0.9%. Meanwhile, Fresnillo surged forward by 2.3% after reporting its positive half-year results.

Despite these winnings, market mood remains cautious and bearish, with investors waiting for central banks’ decisions, which are due later this week.

FTSE100/GBP 5-Day Chart

What Are the Forecasts About the US and UK Interest Rates?

Most analysts predict that the US Federal Reserve will leave its rates unchanged. However, the polls show different results about the UK policy tightening. 58% of participants think that the bank will maintain the current rate, even though the data indicates that services inflation is growing.

Other important reports are coming as well, and they might influence the stock markets. The US jobs report is due this week, along with blue-chip tech companies’ quarterly earnings reports.

On Tuesday, Standard Chartered jumped by 5.1% in London. It made it to the top of the FTSE 100 after the bank stated that its major share buyback was worth $1.5 billion. It also raised its earnings outlook for 2024. That helped to bolster FTSE today, but not by much.

St James’s Place gained much more, adding 18% to the top of the FTSE 250 index. The wealth manager company announced that it is going to cut tens of millions of pounds of costs. With this step, the firm hopes to rebuild investor confidence after recent regulatory checks.

The London Stock Exchange Launched New Main Market

Another positive news is that the London Stock Exchange opened a new Main Market. It introduced the latter at its Market Close ceremony yesterday. The team stated that this was a groundbreaking achievement in the United Kingdom’s capital markets’ evolution.

The Financial Conduct Authority announced updated rules, which are already in effect. Thanks to the latter, companies now have additional opportunities to raise money in Britain. They can merge with or purchase other firms more easily. Investing in the UK markets became easier and more straightforward as well.

On 29 July 2024, Dame Julia Hoggett, CEO of the London Stock Exchange plc, opened the Market Close ceremony. Sarah Pritchard, Executive Director of Markets and International, Financial Conduct Authority, and Lord Hill of Oareford, Officer of the Most Excellent Order of the British Empire, were among the special guests. Stakeholders of major UK stocks also attended the event.

The updated rules will significantly affect the UK financial markets, but hopefully, the changes will be positive. Meanwhile, stay tuned for FTSE 100 and FTSE 250 news. Remember, being informed is crucial for making successful investment decisions.