Markets slump ahead of predicted interest rate hikes
The FTSE 100 ended the day down 67.88 points, or 0.9%, at 7,493.45 points.
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Your support makes all the difference.Nervousness ahead of key interest rates decisions by the Bank of England and the US Federal Reserve kept Europe’s main markets lower on Wednesday.
In London, retail stocks suffered ahead of the latest Bank of England inflation forecasts, while Cabinet ministers also said shoppers should look to buy value products in order to manage their household finances amid the surging cost of living.
The FTSE 100 ended the day down 67.88 points, or 0.9%, at 7,493.45 points.
Across the Channel, the situation was similar as EU investors also digested the trading bloc’s plan to ban Russian oil exports.
It is not difficult to work out why stocks are edging down this afternoon
The French Cac was down 1.24% and the German Dax decreased 0.49% by the end of the session.
“It is not difficult to work out why stocks are edging down this afternoon,” said Chris Beauchamp, chief market analyst at IG.
“The Fed’s rate hike move might be broadly priced in, but markets are clearly nervous that an even more hawkish Federal Open Market Committee might prompt a surge in volatility that could push indices back below last week’s lows.
“Those concerns about a recession won’t be helped by oil’s fresh gains today.”
On Wall Street, the main US markets had a mixed opening after the latest monthly jobs data missed expectations.
Meanwhile, sterling was treading water ahead of the expected increase in interest rates.
The pound decreased by 0.1% against the dollar to 1.248, and dipped 0.03% against the euro to 1.185.
In company news, Paddy Power owner Flutter Entertainment sat atop the FTSE 100 after it said the cost-of-living crisis is not putting customers off gambling as continued growth in the US pushed revenues higher.
It came despite the group revealing that first-quarter UK and Ireland online revenues tumbled 20% compared with a year earlier when the UK and Ireland were in lockdown.
Shares in the company finished 426p higher at 8,716p.
Boohoo tumbled in value after the online firm revealed that profits slumped and costs soared as it struggled to get to grips with difficulties caused by the pandemic.
Bosses said pre-tax profits for the 12 months to the end of February plunged to £7.8 million from £124.7 million a year earlier as distribution costs rose and customer demand fell.
Boohoo shares were 9.92p lower at 70.08p at the close of play as a result.
Fellow fashion brand Joules saw shares plunge again as investors swallowed the double whammy of its chief executive Nick Jones stepping down and a profit warning after a recent slowdown in sales.
It closed 13.75p lower at 41.25p on Wednesday.
The price of oil jumped after the EU said it was looking to implement the Russian oil ban “in an orderly fashion”, helping BP and Shell shares to gains.
Brent crude increased by 3.47% to 108.61 US dollars per barrel when the London markets closed.
The biggest risers on the FTSE 100 were Flutter Entertainment, up 426p at 8,716p, Intertek, up 76p at 5,078p, DCC, up 78p at 6,246p, Aveva, up 23p at 2,187p, and Croda, up 64p at 7,504p.
The biggest fallers of the day were Kingfisher, down 12.7p at 241.6p, JD Sports, down 6.35p at 128.5p, Dechra Pharma, down 162p at 3,364p, Avast, down 23.2p at 508.4p, and Intermediate Capital Group, down 59.5p at 1,464p.