FTSE lower amid global sell-off, London recovery led by PPHE hotels

“The start of September has not brought about any change to the current gloomy mood pervading markets,” says AJ Bell investment director Russ Mould.

“Further weakness in the US and Asia, with the rally of early August an increasingly distant memory, set the stage for selling in Europe. Reports of the US banning the sale of micro-chips by NVIDIA to China and Russia helps move geo-political risks up another notch on the dial.

“Commodities also fell on signs China is yet to shake off its problems with covid, providing yet another section of a wall of worry that markets now have to climb.

“Not even further weakness in the pound, as the Resolution Foundation warns of a ‘frankly terrifying’ outlook for living standards, can spare the FTSE 100 from the pain.

“The US CPI reading for July gave cause for comfort but, at present, it is hard to see where the next piece of positive data which could offer some relief to investors is coming from.

“It’s still a couple of weeks before we get the CPI reading from across the Atlantic for August. Perhaps if that showed the softening of inflationary pressures to be more of a pronounced trend it might boost sentiment and see the Federal Reserve ease up on its hawkish rhetoric.

“For now, the swift reversal in fortunes for stocks will add grist to the mill for those arguing their recovery a few weeks ago represented nothing more than a ‘bear market rally’.”

PPHE Hotel Group

“Hotels group PPHE will hope the positive trends evident in its first-half results aren’t a false dawn. For now, the UK business is leading the way with a recovery in corporate business in London.

“Whether the return of events and business travel can withstand a marked downturn in the UK economy remains to be seen.”

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