European stocks have wavered in a mixed session for global financial markets, as Europe’s central bank cut interest rates and warned over the outlook for growth.
The FTSE 100 was falling during the day on Thursday but had moved higher later in the afternoon, lifted by retailers including Sainsbury’s, Tesco, and Primark owner AB Foods.
By the time markets closed, the blue chip index was flat, edging just 0.06 points higher at 8,275.66.
Other European indexes sank into the red on Thursday. Germany’s Dax index fell 0.49%, while France’s Cac 40 closed 0.6% lower.
The European Central Bank announced it was cutting its key interest rate by 0.25 percentage points, saying that inflation was on track to settle at around its 2% target level.
The bank said in a statement that “the outlook for growth has deteriorated due to rising trade tensions” and cited “exceptional uncertainty” about the future economic situation.
It was a mixed start to trading in the US.
The S&P 500 was up about 0.2%, whereas the Dow Jones was tumbling 1.2% by the time European markets closed, dragged down by heavy losses of more than 20% for health insurer UnitedHealth Group.
Chris Beauchamp, chief market analyst at online trading platform IG, said: “Dow heavyweight UnitedHealth threw traders a nasty prognosis for coming months in its earnings today, dragging the headline US index lower and precipitating a renewed sell-off across markets this afternoon.
“The company’s warning about the outlook just piles on the uncertainty, a point reinforced by the IMF’s (International Monetary Fund) downgrade of the global outlook.”
The pound was up about 0.1% against the US dollar, at 1.325, and up 0.4% against the euro, at 1.166.
The price of Brent crude oil was soaring around 2.8% to 68 US dollars per barrel.
In company news, Sainsbury’s revealed that its sales and profits grew over the year to March, with retail underlying operating profits topping £1 billion.
The supermarket told shareholders that its earnings were likely to be flat over the next year as it faces intensifying competition to lower prices, and grapples with rising costs.
It nonetheless said it was growing market share after investing in improving its pricing. Shares in Sainsbury’s closed 3.6% higher.
Elsewhere, shares in Dunelm soared after the retailer said sales growth had accelerated in recent months amid stronger demand among UK customers for affordable homeware.
Sales grew by 6.3% to £462 million over the first three months of the year, compared with the same period last year.
It also reported a “strong start” for its new spring/summer ranges. Dunelm’s share price jumped 13.3% as a result.
The biggest risers on the FTSE 100 were Rentokil, up 16.7p to 350p, Sainsbury’s, up 8.8p to 256.8p, Pershing Square, up 114p to 3,414p, JD Sports, up 1.96p to 75p, and Taylor Wimpey, up 2.9p to 113p.
The biggest fallers on the FTSE 100 were Fresnillo, down 60p to 1,021p, Melrose Industries, down 9.4p to 410p, Polar Capital Technology Trust, down 6p to 271p, Spirax, down 110p to 5,845p, and Admiral Group, down 56p to 3,202p.
