US stocks saw their worst day in months after the White House found itself engulfed in fresh controversy.
It follows allegations the president asked former FBI director James Comey to drop an inquiry into the former national security adviser Michael Flynn – a potentially impeachable offence.
Banks hurt: Bank of America was down 5.9 per cent, Goldman Sachs lost 5 per cent, and Wells Fargo slipped 1.9 per cent as the so-called ‘Trump trade’ came to an end last night
Trump’s plans to cut taxes and loosen regulation may now be delayed, or simply not come to fruition, some investors fear.
By the closing bell all the major indices were sharply lower, with the Dow Jones down 370 points at 20,609, the S&P 500 was off 43 points at 2,357 and the Nasdaq lost 158.63 points at 6,011.
Bank stocks – which have outperformed the rest of the market in recent months – suffered most.
Bank of America was down 5.9 per cent, Goldman Sachs lost 5 per cent, and Wells Fargo slipped 1.9 per cent.
Meanwhile in the UK it is a jam packed session for results, including Royal Mail, Burberry, Thomas Cook, Greggs and 3i.
The focus this morning will be UK retail sales, in which there is expected to be a rebound in April following a weak March.
ITV will also host a 5-way party leader UK election debate at 8pm, although the headline most likely to be drawn will be non-participation of PM May and Labour leader Jeremy Corbyn, both declining the invitation.
Instead, the leaders of the Lib Dems, UKIP, SNP, Plaid Cymru and Green Party will be left to battle it out on their own, without the heads of the UK’s two largest political parties.
Plenty of red on the equity markets.
One of the big losers in London over the past two days has been Ashtead Group, which is down by more than 4 per cent, on rapidly diminishing expectations of a big US infrastructure boost.
The pound has spiked above £1.30 against the dollar to trade at a 7 and a half month high following a strong beat in retail sales.
The retail sales figure itself was the best since the start of 2016 and will go some way to allay the fears of a slowdown in consumer spending following last month’s sharp drop in this widely viewed indicator.
The release marks a 3rd consecutive day of positive UK economic data, after both the CPI and unemployment figures surpassed estimates.
March saw an unexpected 1.8 per cent decline; the figure for April, however, is forecast to bounce back to 1.2 per cent, the month boosted by Easter.
April’s UK retail sales will provide some insight over the behaviour of consumers amid Brexit developments. With wage growth lagging behind inflation, the sales data may come under scrutiny for any signs of falling wages impacting consumer confidence.
Land Securities, the UK’s largest listed property developer, has warned that Brexit has created business uncertainty in the London office market, leading to falls in demand, rental values and construction commitments.
This is despite the developer of London’s ‘Walkie Talkie’ skyscraper reporting profit up by 5.5 per cent to £382million in the year to the end of March.
Hargreaves Lansdown chairman Mike Evans is to step down as chairman when the group’s nomination committee has identified a successor.
The news comes as the Bristol-based company reported net inflows of £3.3billion in the first four months of the year and £5.6billion of net new business year to date.
Total assets under management rose 10 per cent to £77billion, generating revenue of £315.7million, up 17 per cent year-on-year.
In a separate stock market announcement, Evans, who joined the company as a non-executive director in 2006 before becoming non-executive chairman in 2009, said: ‘Chairing Hargreaves Lansdown over the past eight years has been a real privilege. I have seen the group grow significantly and establish itself as the UK’s leading retail savings and investments platform.’
Lloyds Banking Group boss Antonio Horta-Osorio has splashed out £36,000 buying shares in the lender amid rising speculation over his future.
Horta-Osorio picked up 50,000 shares in Lloyds at 72.31p each, according to a stock market filing issued just a day after the Government sold its final stake in the bank.
The sale, which returned the bank to private ownership nearly a decade after its £20.3billion bailout, has sparked further questions over the chief executive’s future.
Horta-Osorio insisted he is ‘very happy’ at Lloyds, adding that ‘a job is never done’, dampening rumours he could be headed for the exit.
Speculation in the Square Mile has linked Horta-Osorio with a possible move to HSBC, where Stuart Gulliver will step down as chief executive in 2018.
Lloyds said on Wednesday that the taxpayer had made a profit of £894million on the original £20.3billion of cash pumped in as part of its rescue.
In an accompanying statement, Horta-Osorio said: ‘Six years ago we inherited a business that was in a very fragile financial condition. Thanks to the hard work of everyone at Lloyds, we’ve turned the group around.
‘But the job is not done. We’re going to continue to use our strong position to Help Britain Prosper.’
3i, Britain’s biggest listed private equity group, has posted total returns of £1.6billion for its full financial year, an increase from £824million in 2016, aided by ‘very strong’ sales.
The company has proposed a final dividend of 18.5 pence per share, bringing the total dividend to 26.5 pence per share – which is still subject to shareholder approval.
Luxury fashion firm Burberry has revealed underlying annual profits tumbled by more than a fifth, but saw the Brexit-hit pound boost sales in a ‘year of transition’.
The group said underlying pre-tax profits plunged 21 per cent to £462million as it was hit by weak wholesale trading in the US.
Sausage roll maker Greggs has reported a strong start to the year after being boosted by its healthy eating ranges, including cold-pressed juice and freshly prepared salads.
Greggs said like-for-like sales rose 3.6 per cent in the 19 weeks to May 13, with total sales growing 7.5 per cent.
Royal Mail’s annual profits have jumped 25 per cent thanks to better-than-expected growth in its parcel delivery business.
Pre-tax profits rose to £335million in the year to 26 March from £267million, while revenues grew 5.7 per cent to £9.8billion.
Booker, the wholesaler being bought by Tesco for £3.7billion, has reported a 15 per cent rise in annual profit to £174million for the year to 24 March following higher sales for its catering and retail supply businesses.
Holiday operator Thomas Cook reported a rise in pre-tax losses to £314million from £284million despite revenue increasing by 3 per cent to £2.9billion.
Bit of a mixed picture for Mothercare, where annual profits dipped £2.6million to £7.1million despite a 6.3 per cent rise in sales to £1.22billion.