FTSE 100 flat as Abrdn and IWG see shares fall, while markets anticipate drop in US inflation figure

“It was a muted session for European equities on Tuesday morning, with the FTSE 100 flat and the Dax slipping 0.4%,” says Danni Hewson, Financial Analyst at AJ Bell.

“Oil holding firm around $96 per barrel helped to lift shares in Shell and BP, while HSBC and AstraZeneca stock was also in demand. Alas, these gains were offset by a setback at asset manager Abrdn which saw its shares fall nearly 4%, while miners were also weak.

“Abrdn said its growth and cost/income ratio ambitions would take longer to achieve than previously expected, which is something investors didn’t want to hear.

“Tomorrow’s inflation data in the US will be closely watched. Investors have had enough of the rising cost of living and any drop in the inflation number will be welcomed by markets. The consensus forecast for July’s data is 8.7% growth year-on-year versus 9.1% seen in June.

“The fact economists are already predicting a slowdown in the rate of inflation means markets could be in for a shock if the inflation figure does not fall to the expected level. Just remember that inflation was higher than expected in both May and June’s readings, so forecasts can only be taken with a pinch of salt.”

IWG

“Serviced office providers found themselves in an unusual position during the pandemic.

“On one hand, the fact significant chunks of the population were suddenly working from home was a major threat to their earnings.

“On the other hand, the new hybrid working model that has been adopted widely means more companies will want greater flexibility with their office needs. Therefore, using serviced offices might be better than leasing floors, or a building, outright.

“IWG’s latest results indicate progress in the business, with improvements in both occupancy rates and pricing.

“Unfortunately, it cannot escape the cost pressures hurting companies worldwide. Neither can it be relaxed about Covid as certain markets continue to experience lockdowns, which has a negative impact on demand for some of its serviced offices.

“The market did not like the results, with the shares diving more than 17% in early trading. Before the numbers came out, analysts had forecast IWG returning to profit this year at £48.6 million. Given the ongoing cost pressures and lockdown disruptions, it seems likely this estimate will have to be scaled back.”

These articles are for information purposes only and are not a personal recommendation or advice.