Stock Market Update: BP and Burberry Shares Fall, Tech Stocks Rise

The FTSE 100 declined as the shares of BP and Burberry dropped. It issued a warning that profits would take a hit of $2 billion, while the latter was considering potential job cuts. On the other hand, US technology stocks gained on interest in the Fed’s imminent decisions over interest rates.


The FTSE 100 fell sharply today due to the weak performance of BP and Burberry shares. BP, the oil giant, told investors that it would take a $2 billion hit to its profits in the second quarter. Shares in BP slid 19p, or just over 4%, to 455p. The company also outlined weaker refining margins, which further added to the negative outlook.

In addition to BP, Burberry, the luxury fashion house, saw its stock value fall. It has worried investors fearing job cuts and a cost-cutting drive. These were the reasons why shares in Burberry fell significantly during the day to further add to the decline of the FTSE 100, down by 58 points to 8135.41, a fall of 0.7%.

In contrast, the US stock market charted a course of its own. Early trade saw another key New York index, the S&P 500, up. It was lifted by interest in tech stocks following a recent slump. A second factor was interest in signals from the US central bank that it might cut interest rates soon. The chairman of the Federal Reserve is due to testify on monetary policy, and his words will be scoured for clues by investors.

Tech giants like Nvidia and Intel rose about 2% each to drive the general rally of the S&P 500. This jump in tech stocks guaranteed that the S&P 500 vaulted to a new record territory.


Elsewhere, luxury goods firm Mulberry announced a sudden change at the top. Thierry Andretta has stepped down with immediate effect after running the firm since 2015. He is being replaced by Andrea Baldo, who was running fashion brand Ganni. Shares in Mulberry were off 6% at 96p as investors reacted to the loss. It has battled a more general decline in luxury consumption, especially in the UK and Asia.

Shares in BP fell 3.5%, by 16.6p to 458p, after it gave discouraging guidance for the second quarter. This is because of flat oil and gas production compared with the previous quarter coupled with negative revisions to refining margins.
It wasn’t all bad news, however; some FTSE 100 companies performed quite strongly. Shares in Kingfisher, the B&Q owner, increased by 9.9p to 475.5p after it was upgraded by Deutsche Bank to “buy”. That strong performance came despite an upbeat report last week from the British Retail Consortium that reported dreadful June sales of DIY and equipment for gardening because of bad weather.


The broader FTSE All-Share index rose after Capita’s shares leaped 3.2p to 18.7p following its announcement of the sale of its public sector software business for £200 million to Orchard Information Systems. A jump of 20% in Capita’s shares was definitely a reminder of how sharp strategic business decisions can be.

The FTSE 100 was driven lower by heavy falls in BP and Burberry; on the other hand, interest in the exact decision the US Federal Reserve will reach over interest rates kept the US tech sector in optimism. Against the backdrop of such dynamic market changes, investors are remaining alert to company-specific news as well as wider economic indicators.


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