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Global stock markets slump as concerns over US economy linger

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The world’s top stock indices continued on a downward trend on Friday as concerns over the US economy persist following the release of weaker-than-expected jobs data.

London’s FTSE 100 dropped by 60.24 points, or 0.73%, to end the week at 8,181.47.

It was dragged lower by losses for miners and banks, with a gloom among investors in the US sending stocks lower across the pond.

In New York, the S&P 500 was falling by about 1.5% and the Dow Jones was down 0.9% by the time European markets closed.

New official data on America’s job market painted a mixed picture, leaving economists wondering what it could mean for policymakers setting interest rates later this month.

The country added fewer jobs than expected in August but saw its unemployment rate ease.

James Knightley, chief international economist for ING, said: “The jobs report provides a real mix of numbers that does little to resolve the debate over whether the Fed will cut rates by 25 basis points or 50 basis points on September 18.

“We have a 50 basis point in our forecast, but it is a low conviction call made on the basis that inflation fears have receded and the Fed will want to get ahead of labour market weakness, which we think will become increasingly apparent in the months ahead.”

The downbeat mood was felt across Europe, with Germany’s Dax slumping 1.59% at the end of the day, while France’s Cac 40 shed 1.07%.

The pound was down around 0.3% against the US dollar at 1.3135, and down 0.1% against the euro at 1.185.

The price of Brent crude oil dropped 1.7% to 71.45 US dollars per barrel.

In company news, shares in Next 15 plunged by nearly 50% after the digital communications firm told investors that a key contract would not be renewed at the end of the year.

The company said it had experienced an ongoing weakness in spending from its technology customers and reduced sales from public sector clients.

It therefore downgraded its revenue and profit expectations for the year. Shares in Next 15 closed 48% lower.

Elsewhere, Darktrace said its chief executive Poppy Gustafsson was stepping down ahead of the company being taken over by private equity group Thoma Bravo.

Ms Gustafsson, who co-founded the cybersecurity firm in 2013, will be replaced as chief executive by Jill Popelka.

Shares in Darktrace, which is awaiting approval from European regulators for the acquisition to go ahead, were flat at the end of the day.

The biggest risers on the FTSE 100 were Severn Trent, up 40p to 2710p, Smith & Nephew, up 16.5p to 1198.5p, United Utilities, up 12p to 1068p, Relx, up 33p to 3519p, and Endeavour Mining, up 14p to 1561p.

The biggest fallers on the FTSE 100 were Vistry, down 90p to 1340p, Burberry, down 33p to 604.4p, Antofagasta, down 64p to 1638.5p, AB Foods, down 85p to 2204p, and Anglo American, down 78p to 2024p.