A fresh wave of promising economic indicators from the UK, paired with the alleviation of Monday's global market selloff, facilitated a rebound for London stocks, propelling them back into positive territory. By the close of Tuesday's trading session, the blue-chip FTSE 100 index demonstrated a noteworthy last-minute recovery, climbing by 0.23%.
Conversely, Rightmove ($RMV) encountered the largest setback, plunging 4.34% into the red. The decline was attributed to the impending termination on September 1 of OpenRent's membership in its property portal, a decision stemming from a disagreement over contractual conditions. Despite this setback, Rightmove has expressed confidence in its anticipated revenue growth for 2024, although they also issued caution regarding a potential downturn in membership numbers.
Following this revelation, Bernstein revised its adjusted earnings per share (EPS) forecast for Rightmove downward by 1% for 2024 and by 3% for 2025. Nonetheless, analysts retained an outperform rating for the company, albeit recognizing the current weakness in its share price. In broader economic developments, the S&P Global UK Construction Purchasing Managers’ Index (PMI) experienced a robust acceleration in July, rising to 55.3—significantly higher than the 52.2 recorded in June and exceeding analysts' consensus estimates of 52.7.
This surge in July was marked by enhanced growth in both construction activity and new orders, as highlighted by S&P Global Market Intelligence. According to Andrew Harker, Economics Director at S&P Global Market Intelligence, 'The election-related slowdown in growth observed in June was merely temporary, with July's expansion rapidly gaining momentum.
Firms reported the strongest rise in new orders and activity since 2022, thanks to the release of previously paused projects amid encouraging reports of improving customer confidence.' In a wider European context, S&P Global noted that output decreased in 13 out of the 20 monitored sectors across the continent during July.
The banking sector emerged as the top performer, while the automobiles and auto parts sector suffered the steepest decline in output. The current state of the market reflects a complex interplay of growth and challenges, particularly for companies like Rightmove, as they navigate evolving market conditions and sector-specific hurdles..