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London open: Stocks dip after World Bank warning; Sainsbury's in the red
(Sharecast News) - London stocks fell in early trade on Wednesday following a downbeat growth forecast from the World Bank, and as investors eyed the latest US inflation data this week. At 0830 GMT, the FTSE 100 was down 0.2% at 7,668.49.
Sentiment took a hit after the World Bank warned the global economy was on course for the weakest growth since the pandemic.
In its latest 'Global Economic Prospects' report, the Bank said global growth was expected to slow to 2.4% in 2024 from 2.6% a year earlier.
World Bank chief economist and senior vice president Indermit Gill said: "Without a major course correction, the 2020s will go down as a decade of wasted opportunity."
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "With the World Bank forecasting that geo-political crises will drag global growth back to the slowest pace since the pandemic, there is little momentum for the internationally focused FTSE 100.
"The Bank is forecasting that trade and investment will also be stifled by conflict. Although oil has ticked back up with supply issues rearing up again amid fears the Gaza-Israel war will escalate, metals prices have largely fallen back, putting pressure on mining stocks."
In equity markets, Sainsbury's slumped despite holding full-year profit guidance and saying that strong volume growth had helped lift Christmas grocery sales by 8.6%.
CMC Markets analyst Michael Hewson noted that there had been a fair degree of optimism over pre-Christmas trading numbers for the major supermarkets in the lead-up to the latest retail updates this week.
"In truth there may have been a little too much optimism with Sainsbury share price pushing up to its highest levels since August 2021 yesterday, while Tesco has also seen strong gains in the past few months its shares pushing up to 1-year highs last week," he said.
"All in all, today's numbers are a solid performance however markets had been expecting a little bit more given recent declines in the cost of living and the big jump in UK retail sales seen in November."
Elsewhere, Persimmon rallied as the housebuilder beat guidance on new home completions in 2023 after a decent fourth quarter, and said it hade entered 2024 in a strong position with private forward sales ahead of last year.
New home completions totalled 9,922 last year, down 33% on 2022 on the back of challenging market conditions with the whole industry being impacted heavily by rising mortgage rates. However, that was ahead of the 9,500 target given in November.
Greggs surged as it backed its full-year guidance and posted a jump in fourth-quarter sales, with seasonal lines in high demand.
In broker note action, Intertek gained after an upgrade to 'outperform' at RBC Capital Markets.
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