MARKET REPORT: Bruised FTSE 250 suffers worst week for 18 months

Crumbling confidence in the economy consigned the FTSE 250 to its worst week in more than a year.

With about 40 per cent of its sales made at home, the mid-cap index is vulnerable to the weakening pound and deepening concern about the UK’s growth prospects and fiscal credibility.

A decline yesterday of 1.4 per cent, or 271.2 points, to 19733.94 left the FTSE 250 at its lowest since April, down 4.2 per cent over the week, its sharpest loss since June 2023.

Simon French, chief economist at investment bank Panmure Liberum, said: ‘It’s a damning verdict on October’s Budget, which failed to sell the UK as a destination for investment and growth.’

Earlier this week, data from global funds network Calastone showed investors pulled £9.6billion from UK-focused equity funds in 2024 in its worst year on record. Conversely, the pound’s woes limited loss on the FTSE 100, which derives about four-fifths of its earnings overseas.

In spite of a dip of 0.9 per cent, or 71.2 points, to 8248.49 yesterday, London’s leading index stood 0.3 per cent higher over the past five days.

Downward trend: The FTSE 250 was down 4.2 per cent over the week, its sharpest loss since June 2023

UK markets remained in thrall to Wall Street, where a closely watched report showed the US economy added 256,000 jobs in December, far more than expected.

US shares were rattled, gold rose further and Treasuries led gilt yields still higher as markets bet renewed concern about inflation would prompt the Federal Reserve to cut US interest rates more slowly this year, if at all.

Dearer energy also threatened to feed inflation. Hungry Chinese demand, dwindling US stockpiles, and a report of harsher sanctions on Russia spurred crude to its highest since October. Good news for oil shares, with Hunting – which provides equipment for the energy sector – creeping up 0.2 per cent, or 0.5p, at 306.5p.

Not so for gas-guzzling airlines. Wizz Air slumped 7.6 per cent, or 101p, to 1229p.

Meanwhile, investors picked through the latest batch of company updates. They were the usual mixed bag.

Clarkson jumped 9.9 per cent, or 385p, to 4275p on its best day since August after the £1.3billion shipping services company said profit in 2024 of at least £115m would be a touch ahead of expectations. And on Aim, further positive drilling results from its Segilola gold mine in Nigeria buoyed Thor Explorations by 1.4 per cent, or 0.25p, to 18p.

But energy services company Enteq Technologies shares lost three quarters of their value, collapsing 75.2 per cent, or 2.33p, to 0.77p, after it said it may run out of cash earlier than expected.

Vodafone slipped 0.5 per cent, or 0.36p, to 66.18p after selling its remaining stake in Indus Towers, India’s largest mobile tower installation company, for about £270m. Part of the proceeds were used to lift the telecoms giant’s holding in Vodafone Idea, another Indian telecoms company, from 22.6 per cent to 24.4 per cent.

Among the retailers, Mike Ashley’s retail giant Frasers Group lifted its interest in Marks Electrical Group above 7.8 per cent. Frasers dipped 0.9 per cent, or 5p, to 581p and Marks was unchanged at 53p.