What happened in the stock market today

Jonathan Smith talks through the best and worst performers in the stock market today, along with explaining why the FTSE 100 finished lower.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

happy senior couple using a laptop in their living room to look at their financial budgets

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The FTSE 100 finished lower by 0.6% on Wednesday, with the stock market struggling to make gains due to negative sentiment and news of potentially higher tax rates. After falling heavily on open, the index was down over 1% by mid-morning. However, it did manage to rally back over the course of the rest of the day, before falling again as we headed towards the end of the day. 

The winners and losers

The main losers that dragged the stock market down today were homebuilders and property-related stocks. Taylor Wimpey, Persimmon, Barratt Developments, and Land Securities were all down over 2%.

This likely linked back to the overall sentiment of caution around the economic recovery here in the UK. The property market has performed exceptionally well over the past year. But with stamp duty holidays now over and recent economic data not as positive as some expected, the housing sector could come under pressure.

The main gainers in the stock market today were from a mix of areas. The top performer was B&M European Value Retail, with shares rallying almost 7%. This came after a positive trading update was released. In it, the company noted that “gross margins have been stronger than originally anticipated”. As a result, it has hiked its profit guidance for the rest of the year.

The second top gainer was Smiths Group. It saw its share price rise almost 3% thanks to confirmation of selling off a division to ICU Medical for $2.4bn. The medical division that it was looking to sell had others bids. Ultimately, this one that was chosen was clearly taken in a positive light by investors.

Negative sentiment weighing on the stock market

The overall index did finish in the red. One reason for the downbeat mood was the news that National Insurance contributions are set to rise. The money raised is expected to be able to give the NHS £36bn over a three-year period. 

There is also going to be an increase of 1.25% on the rate of dividend tax. Aside from the tax-free allowance (currently at £2,000 a year), this bump up in tax will impact investors across the board.

Regardless of political affiliation, higher taxes are usually taken as a negative by financial markets as it signals a tightening of fiscal policy. In a similar way, tightening monetary policy (such as higher interest rates) is also a negative for the stock market.

Added to this was concern about the economic recovery from Covid-19. This weighed not only on the stock market in the UK, but also around the world. For example, the German DAX closed down 1.3% and currently the US NASDAQ is down 0.8%.

Overall, today was a negative day for the stock market, but there were still some good stories to find within the FTSE 100 index.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

jonathansmith1 has no position in any share mentioned. The Motley Fool UK has recommended B&M European Value and British Land Co. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

5 Warren Buffett investing moves I’ll make in 2025

I’m planning to channel Warren Buffett in 2025. I won’t necessarily buy the same stocks as him, but I’ll track…

Read more »

Investing Articles

Here’s why 2025 could be make-or-break for this FTSE 100 stock

Diageo is renowned for having some of the strongest brands of any FTSE 100 company. But Stephen Wright thinks it’s…

Read more »

Investing Articles

1 massive Stocks and Shares ISA mistake to avoid in 2025!

Harvey Jones kept making the same investment mistake in 2024. Now he aims to put it right when buying companies…

Read more »

Value Shares

Can Lloyds shares double investors’ money in 2025?

Lloyds shares look dirt cheap today. But are they cheap enough to be able to double in price in 2025?…

Read more »

Investing Articles

How realistic is the 10%+ dividend yield from this FTSE 250 stock?

The FTSE 250 is brimming over with forecast dividend yields of 10% and even higher as we head into 2025.…

Read more »

Investing Articles

Here are the latest Rolls-Royce share price and dividend forecasts for 2025

Our writer takes a look at the Rolls-Royce share price target and valuation to determine if he should buy more…

Read more »

Young brown woman delighted with what she sees on her screen
Investing Articles

Here’s why the Legal & General share price could soar in 2025!

Legal & General's share price has slumped in 2024. Here's why it might be one of the FTSE 100's best…

Read more »

smiling couple holding champagne glasses and looking at camera at home with christmas tree
Investing Articles

2 of my favourite exchange-traded funds (ETFs) for 2025!

Royston Wild thinks these exchange-traded funds could soar again next year. Here's why he's considering them for his portfolio.

Read more »