With fears over a possible stock market crash, last week saw a frenzy of share trading. Over £32 billion of shares were bought and sold on the London Stock Exchange, the second-highest weekly total in a year. War in Ukraine, together with existing concerns over rising inflation and recession, spooked global stock markets.
Given the difficult trading environment, I’m going to analyse the most-sold shares last week. I’ll also explain what investors might want to consider before selling their shares in a market downturn.
[top_pitch]
What were the top 10 most-sold shares?
According to Hargreaves Lansdown, these were the 10 shares most sold by their clients last week:
Company (and ticker)
1
Scottish Mortgage Investment Trust (SMT)
2
Lloyds Banking Group (LLOY)
3
BP (BP.)
4
Rolls Royce Holdings (RR.)
5
Eurasia Mining (EUA)
6
Synairgen (SNG)
7
International Consolidated Airlines Group (IAG)
8
Polymetal International (POLY)
9
Shell (SHEL)
10
Cloudbreak Discovery (CDL)
What does this tell us about general trends? Well, the companies covered a range of sectors from investment trusts to aviation. Three of the companies, Eurasia Mining, Polymetal and Cloudbreak, operate in the mining sector. And, unsurprisingly, BP and Shell have been impacted by concerns over disruption to supply in Russia and Ukraine.
What do we know about the top 5 shares?
1. Scottish Mortgage Trust
This flagship investment trust was the most sold share by some margin.
SMT’s focus on high-growth companies such as Tesla and Amazon delivered a stellar 110% return in 2020, according to data from Morningstar. However, it’s been hit by the recent tech sell-off, with a fall of 25% in 2022. With rising inflation hitting the valuations of high-growth companies, investors may be trading SMT shares to make gains.
2. Lloyds Banking Group
In an already jittery market, Lloyds was punished for missing its profits forecast last week. Its share price fell by 11% when its results were announced. And it’s still having to pay over £1 billion in legacy remediation costs relating to fraud at HBoS Reading.
However, Lloyds shares were trading around the 26p mark in mid-2020, and these shareholders could have doubled their money had they sold last week.
3. BP
Despite oil prices hitting $105 a barrel, BP’s shares have dropped by 8% in the last week. No doubt investors are concerned by the disruption to supply caused by the invasion of Ukraine.
BP has just announced that it will exit its stake in Russian oil business Rosneft. Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, estimates that this could cost up to $25 billion (£18.7 billion). She describes this decision as “an eye-wateringly expensive one for BP.”
4. Rolls Royce
It’s been a roller coaster for Rolls Royce shareholders, with the company making losses in five of the last six years. Its share price high of over 350p in 2018 certainly seems a distant memory.
There was some recovery in the share price towards the end of 2021, with the forecast revival in aviation. However, the share price fell again as a result of Omicron travel restrictions. And after a one-day drop of 13% last week, investors may have run out of patience.
5. Eurasia Mining
Eurasia Mining is involved in the exploration and production of gold and platinum. It’s been a good choice for intrepid longer-term investors, delivering five-year share price growth of 1,800%.
However, the company’s share price has fallen by more than 70% in the last year. As it operates mines in Russia, investors may be selling due to concerns over the impact of possible sanctions.
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Should you sell your shares in falling markets?
It’s been a challenging year for share trading in 2022. Perhaps unsurprisingly, the Nasdaq has fallen by 20% after investors took profits from their gains in tech stocks. Soaring inflation and rising interest rates have put pressure on UK stock markets, followed by the war in Ukraine.
Our Foolish philosophy is to buy and hold shares in quality companies for the long term. Share trading is difficult in the short term and even seasoned professionals struggle if they try to ‘beat the market’.
What’s more, a report by IG showed that markets often recover much of their losses in the 12 months after a sudden drop. The FTSE 100 dropped by over 50% when the ‘dot-com bubble’ collapsed in 2003. Yet, it increased by 41% over the next 12 months. And, while the FTSE 100 fell by 6% last week, it still finished the week higher than it started.
We’ve created a beginner’s guide to investing in stocks that can help you establish an investment strategy before you start trading. Our experts have also researched the market to provide you with details of our top-rated share-dealing accounts.
This quote from legendary investor Warren Buffett summed up the need for a level head when trading: “You’re dealing with a lot of silly people in the marketplace; it’s like a great big casino and everyone else is boozing. If you can stick with Pepsi, you should be OK.”
The post The 10 most-sold shares last week by investors trading in turbulent markets appeared first on The Motley Fool UK.
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