FTSE 100 drops to month low as rate cut hopes ease
The FTSE 100 moved 0.48%, or 36.57 points lower, to finish at 7,558.34.
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Your support makes all the difference.The FTSE 100 closed at its lowest level for a month as hopes of early interest rate cuts this year continued to dwindle.
It came despite fresh data from the Office for National Statistics (ONS) showing UK wage growth slowed to the lowest rate for 10 months.
UK average regular earnings, excluding bonuses, increased by 6.6% in the three months to November, down from a revised 7.2% in the previous three months.
The data would typically add more fuel to predictions rate cuts could be on their way but failed to offset wider concerns about borrowing costs driven by more tentative central bankers.
The prospect that rate cuts may well come much later in the year has seen yields rebound from their recent lows, while sending the FTSE 100 to one-month lows
Reappraisals from economists of the interest rate outlook for both the Federal Reserve and European Central Bank drove global sentiment slightly lower.
The FTSE 100 moved 0.48%, or 36.57 points lower, to finish at 7,558.34.
The German Dax index was down 0.3% at the close and the Cac 40 closed down 0.18%.
Michael Hewson, chief market analyst at CMC Markets UK, said: “The weakness we saw in European markets on Monday has carried over as the continued pushback on rate cut expectations from central banks has served to boost the US dollar as well as undermine confidence in risky assets, as concerns over the economic outlook grow.
“The prospect that rate cuts may well come much later in the year has seen yields rebound from their recent lows, while sending the FTSE 100 to one-month lows.”
In the US, tech firms led the fallers with Apple among those in the red after announcing price cuts in China to stop losing sales to rival Hauwei.
In currency, hawkish economist commentary about the Fed boosted the dollar against the pound.
The pound was down 0.53% at 1.265 US dollars but was 0.13% higher at 1.163 euro at market close in London.
In company news, Shell dipped in value after reports the oil giant decided to suspend all its shipments through the Red Sea after ships passing through the area were repeatedly targeted by Houthi attacks.
Sources told the Wall Street Journal that the decision was taken after the US and UK launched counter attacks on Houthi targets in response to the group’s actions.
Shares in the energy firm finished 24.5p lower at 2,435.5p.
Superdry shares slumped after Sky News reported the struggling fashion firm has drafted in advisers from PwC to assess options related to its debts.
The move came after it issued a profit warning just before Christmas, blaming a tough consumer retail market and abnormally warm autumn weather delaying sales of its crucial autumn/winter range.
Superdry stock was down 3.4p at 26p.
Ocado shares edged 1p lower to 618p despite the technology retailer returning to positive annual earnings after sales growth improved.
The price of oil edged marginally higher as military action continues in the Red Sea against Houthi rebels. A barrel of Brent crude oil was down by 0.15% to 78.27 US dollars (£61.80) as markets were closing in London.
The biggest risers on the FTSE 100 were Experian, up 74p to 3,200p, Hikma Pharmaceuticals, up 37p to 1,970p, Compass Group, up 30p to 2,220p, Burberry, up 15p to 1,227p, and Flutter Entertainment, up 120p to 13,270p.
The biggest fallers on the FTSE 100 were JD Sports, down 5.95p to 107.35p, Fresnillo, down 24.4p to 502.8p, Rightmove, down 22p to 542.8p, Standard Chartered, down 15.8p to 589.2p, and Barclays, down 3.58p to 141.4p.