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MARKET REPORT: Segro plunges 10% as online shopping boom falters

MARKET REPORT: Segro plunges 10% after analysts downgrade warehouse giant Footsie as online shopping boom falters

Segro shares plunged to six-month lows after analysts downgraded.

The company – which is one of the UK’s largest commercial property groups – fell 10.3%, or 138.5p, to 1,204p after Kepler Cheuvreux downgraded its rating on the ‘hold’ stock to “reduce” and reduced the target price to 1240p from 1360p.

It followed a similar move by analysts at Royal Bank of Canada, which cut the warehouse giant’s FTSE 100 target price last week to 1250p from 1325p.

Falling demand: Sergo – one of the UK’s largest commercial property groups – fell 10.62% after Kepler Cheuvreux downgraded its rating on the stock from ‘hold’ to ‘reduce’

The twin downgrades marked a change of fortune for the company, whose profits surged during the pandemic as a boom in online shopping drove up demand for its warehouses.

The group’s profits for 2021 jumped 20% to £356m, while the value of its portfolio rose nearly 29% to £18.4bn.

The dividend was also increased by 10% to 24.3p per share.

Warehouse owners such as Segro emerged as the winners of the pandemic lockdown as retailers scrambled to secure additional storage space to cope with the growing number of online delivery orders.

As central banks around the world hike interest rates in a desperate battle against inflation, the FTSE 100 index fell before ending up 0.22 points at 7561.33, while the FTSE 250 fell 0.91 points to 20520.76.

The Reserve Bank of Australia raised rates for the first time in more than a decade by a surprisingly high 0.25 percentage points to 0.35%, and signaled that more was to come.

The Federal Reserve is widely expected to raise rates in the US today, while the Bank of England is expected to act tomorrow.

Stock Watch – Hutchmed

Chinese biopharmaceutical company Hutchmed fell after US regulators failed to approve its latest cancer drug.

The London-listed company said its trials of surufatinib, which treats pancreatic tumours, did not satisfy the Food and Drug Administration, which wants to see a larger multi-regional clinical trial before giving the green light.

Hutchmed boss Weiguo Su called the decision “disappointing”.

The company’s shares fell 15.1%, or 37p, to 208.5p.

The rate increases come amid fears of devastating stagflation around the world as economies slow as prices rise.

Fitch cut China’s GDP growth forecast for 2022 to 4.3% from 4.8%, saying pandemic-related disruptions had an impact in the first two quarters of the year, fueling fears about the health of the global economy.

Mining stocks were in the red as worries about the global economy hit commodity prices.

Glencore fell 2.8%, or 13.8p, to 483.5p despite bullish forecasts from brokers.

Glencore had its “overweight” rating maintained by Barclays, which said it expected to see “meaningful returns for shareholders looming in August”.

The bank added: “Marketing is running at full steam, which should dispel concerns over trade losses due to recent commodity price volatility.”

Meanwhile, Antofagasta lost 1.8pc and Endeavor Mining slipped 1.1pc.

The biggest riser in the blue chip index was BAE Systems. Ahead of its trading update tomorrow, the company rose 3.6%, or 26.6p, to 766.6p, taking gains for the year to around 40%.

The company has risen sharply since Russia invaded Ukraine as the war puts pressure on governments to increase defense spending.

BP rose 5.8% after the oil giant posted its highest quarterly profit in more than a decade.

But the company has come under increasing pressure after windfall profits renewed calls for the imposition of a windfall tax.

Cybersecurity group Avast fell 5.7%, or 32.4p, to 531.6p after saying it expected slower growth and lower profits due to a “soft backdrop”. difficult world”.

At the second tier, online auction platform Auction Technology jumped 8% following a broker upgrade.

JP Morgan raised its rating from “overweight” to “neutral” and raised the price target to 1150p from 1041p.