[ad_1]
The FTSE 100 slipped a further 3.66% this week, extending a losing streak that began in mid-April 2026. The leading index for UK shares is now down almost 5% from its 52-week high, hinting at a potentially prolonged downturn.
This decline is primarily driven by heightened geopolitical instability in the Middle East and concerns over its impact on global energy infrastructure. That means investors are getting extra jittery about the UK economic situation â in particular, sticky inflation and a weaker labour market.
While nobody likes to sell at a loss, holding on to shares that face structural challenges might do more damage in the long run.
So in this tempremental environment, here are two shares I’d consider avoiding for now.
Associated British Foods
Associated British Foods (LSE: ABF) is a well-established supplier of everyday goods, giving it defensive credentials. Prior to Covid, it enjoyed 20 years of unbroken dividend increases, making it attractive to income investors.
But disappointing festive trading in 2025 led to a profit warning, putting the share price under severe pressure.
Recent earnings reports reflect a struggle to maintain volume growth in a cost-cutting environment. So even with a decent dividend history, sustainability is now questionable. Not ideal for for those eyeing long-term dividend returns.
Of course, this means the valuation is weakening as analysts downgrade profit forecasts, which could offer a cheap entry point for value hunters.
The primary risk is its heavy reliance on consumer discretionary spending. With inflation still tightening consumerâs wallets, traditional retail faces a difficult road to recovery.
Endeavour Mining
Mining stocks are often treated as safe havens, but Endeavour Mining (LSE:EDV) tells a different story. Its fortunes (and share price) exploded recently inline with a rallying gold price. So long as gold remains strong, it could keep growing.
But the firm has seen high volatility as geopolitical instability ripples through the commodity markets.
From a financial standpoint, it’s doing well but rising costs are a concern. Subsequently, the market has responded with caution, which naturally has hit the share price.
On top of that, the dividend story has been erratic, largely because management is currently prioritising capital preservation and debt reduction over shareholder payouts.
So now we have a company that relies heavily on operational stability in politically sensitive regions. Thatâs not exactly a low-risk investment. If gold demand softens, it could all come tumbling down like a house of cards.
What are some better options?
Avoiding these stocks isn’t about panicking, it’s about recognising that the capital might be better deployed elsewhere. Both ABF and Endeavour Mining face specific pressures that could persist for some time, whether weak retail demand or operational hurdles in volatile regions.
Keeping your money tied up in underperforming cyclical assets during a market downturn is a classic investing trap.
Rather than clinging to stocks that are under water, shifting toward more defensive, reliable options might be worthwhile. Consider utility companies like SSE and National Grid, or blue-chip pharmaceutical giants such as AstraZeneca. They look more stable than retail and mining stocks right now.
These firms typically offer more consistent dividend payouts and possess the âdefensive moatsâ necessary to weather economic storms.
By strategically allocating capital into more resilient sectors, you can safeguard a portfolio while waiting for the market outlook to improve.
The post 2 UK shares to consider avoiding as the FTSE 100 extends losses appeared first on The Motley Fool UK.
Should you invest £1,000 in Associated British Foods Plc right now?
When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Associated British Foods Plc made the list?
.custom-cta-button p
margin-bottom: 0 !important;
color:#cc0000;
div.entry-footer div.textwidget div.braze-content-card div.wp-block-custom-block-collection-presentational-card
padding: 0 !important;
margin: 0 !important;
More reading
- How is Primark coming to the FTSE 100 an exciting opportunity for investors?
- As Endeavour Mining shares jump 7% on Q1 results, is this a way into the gold rush?
- 3 FTSE 100 shares I think look undervalued heading into May
- Time to buy Associated British Foods (ABF) shares after this exciting news?
- How to invest £500 in the FTSE 100 today
Mark Hartley has positions in AstraZeneca Plc and National Grid Plc. The Motley Fool UK has recommended Associated British Foods Plc, AstraZeneca Plc, and National Grid Plc. 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.
[ad_2]
Source link