The deepening crisis in Ukraine has sent global stock markets into freefall. The FTSE 100 has fallen by 9% since its post-pandemic high of 7,687 only a month ago. As a result, £36 billion of shares changed hands on the London Stock Exchange last week, one of the highest trading volumes in a year.
Against this challenging trading backdrop, I’m going to look at the most-sold shares by UK investors last week. I’ll also explain some simple steps that might limit losses in the event of a stock market crash.
The top 10 most-sold shares last week
Hargreaves Lansdown reports that these were the most-sold shares by its clients last week, based on the total value of deals. Just over half of these companies operated in the natural resources and investment management sectors.
Company (and ticker)
Glencore plc (GLEN)
iShares plc (ISF)
Shell plc (SHEL)
BP plc (BP.)
Lloyds Banking Group plc (LLOY)
Scottish Mortgage Investment Trust plc (SMT)
BAE Systems plc (BA.)
Vanguard Funds plc (VUKE)
Rolls Royce Holdings plc (RR.)
AstraZeneca plc (AZN)
What can we learn about the five most-sold shares?
Glencore recently announced bumper profits after the bull run in the metals market. Although the company invests in decarbonisation products, it remains one of the largest global producers of thermal coal.
This may create a potential issue for ESG investors. The Financial Times reports that “Investors don’t want to own coal [and] bankers don’t want to fund it.”
Glencore’s also been affected by the war in Ukraine, announcing a review of its equity stakes in two Russian businesses, En+ and Rosneft. With its share price trading at a 10-year high, investors may be deciding to cash out their profits.
iShares is an exchange-traded fund (ETF) that aims to track the FTSE 100. At the beginning of February, it was trading at its highest level since the pandemic.
Investors buying the iShares ETF 18 months ago would have achieved a 37% return on their investment. With fears of a stock market crash, investors may have taken the opportunity to realise gains.
Shell’s profits quadrupled to historic highs in 2021, helped by the soaring oil and gas prices. This helped to drive the share price up to its highest level since the pandemic.
However, Shell’s share price fell by nearly 11% last week as it announced its exit from its joint venture with Gazprom and the Nord Stream 2 gas pipeline project.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, commented that “exiting Russia’s energy sector will be hugely challenging.” This may have prompted investors to look for safer alternatives.
BP’s share price fell by 8% last week after it announced the sale of its lucrative 20% stake in Russian state-controlled oil company Rosneft. This will have a major operational and financial impact as Rosneft accounts for a third of BP’s overall oil and gas production. And the company announced that it may also result in a $25 billion charge.
Share sales may have been triggered over fears of BP managing to find a buyer for its Rosneft stake and the further risk of expropriation.
5. Lloyds Bank
The Lloyds share price has climbed steadily over the past 18 months. It was trading at 26p in mid-2020 but had nearly doubled to 51p by January 2022. However, its share price dipped after missing its latest profit forecast, which may have encouraged investors to take their gains.
How might investors limit losses in a falling market?
Here are a few simple tips to help protect against downside risk in turbulent markets:
Avoid over-trading: it’s tempting to try to ‘sell high’ and ‘buy low’, but even professionals struggle to beat the market. Holding investments for the longer term is a sensible strategy to cope with market volatility.
Consider the use of ‘stop-loss’ orders: if the share price falls below a set level, your shares are automatically sold. This can help limit the downside risk from buying shares.
Diversify your portfolio: investing in funds spreads the risk of one company underperforming. Similarly, investing in a range of asset classes such as shares, bonds and property can also reduce your exposure.
I’ve recently bought the Legal & General FTSE 100 Super Short ETF (SUK2) to act as a hedge against my equity investments. If the FTSE 100 falls, the ETF rises by double the amount (i.e. if the FTSE falls by 5%, the ETF rises by 10%). However, it carries a higher level of risk and is designed as a short-term option for experienced investors.
Choosing a broker for share trading
It’s worth taking the time to pick the right broker for your share trading. to help you, our experts have researched the market to provide a list of top-rated share dealing accounts.
Or, if you want to compare fees across the different platforms, our brokerage calculator calculates the fees based on your investing characteristics.
The post The 10 most-sold shares during last week’s share trading frenzy appeared first on The Motley Fool UK.
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