FTSE 100 closes in the red after interest rates hiked again
London’s top index moved 0.89%, or 68.24 points, lower to finish at 7,499.6.
The FTSE 100 dropped after the Bank of England and Federal Reserve both announced interest rate increases.
The central banks increased rates by 0.25 percentage points despite concerns over pressure on the banking sector.
Sentiment was weak across Europe at the start of trading, driven by the Federal Reserve’s continued aggression to stave off inflation and held firm after the Bank followed suit, although trading became more settled later in the day.
London’s top index moved 0.89%, or 68.24 points, lower to finish at 7,499.6.
The FTSE was partly lower due to the strength of sterling, which was boosted by confirmation of higher rates and a drop in the dollar.
The pound was up 0.5% to 1.232 US dollars, and rose by 0.12% to 1.131 euros at market close in London.
Chris Beauchamp, chief market analyst at IG, said: “It looks like it will take more than some hikes by central banks to deter investors from pushing stocks higher.
“After a shaky start this morning, equities have had a better afternoon; European markets have clawed back most of their losses while the US is enjoying renewed strength.
“A slew of ex-dividends and gains for sterling have meant the FTSE 100 hasn’t joined in the more optimistic afternoon session.”
Elsewhere in Europe, the German Dax fell by 0.03%, and the French Cac 40 increased by 0.05% at the close.
Across the Atlantic, the main US markets bounced higher on the opening bell, with the tech-heavy Nasdaq leading the way.
In company news, Amigo said it will wind down after failing to secure sufficient interest to raise funds which could keep it operating.
The company said on Thursday that it realised it would not be able to meet the terms of a High Court scheme which was intended to compensate customers.
As a result, the stock plunged by 85%, or 1.49p, to 0.25p. It represents a sharp fall from grace for the business which was valued at around £1.3 billion in 2018 to be worth less than £2 million. Home improvement retailer Wickes finished slightly down after it revealed slumping profits in the face of soaring costs.
The group, which also trades as a builders’ merchant, posted a 38.4% fall in pre-tax profits to £40.3 million for 2022 and cautioned that sales have also started 2023 on the backfoot.
Wickes shares closed 2.3p lower at 142.7p by the end of the session.
Elsewhere, stockbrokers FinnCap and Cenkos agreed an all-share £43 million merger to create a group with combined revenues of more than £50 million.
FinnCap, which has seen its value drop over past years, was boosted by the announced.
It closed 0.6p higher at 12.25p while Cenkos dropped 0.5p to 38.5p. The price of oil was supported by weakness in the dollar, helping it push higher for a fourth consecutive day.
Brent crude oil decreased by 0.24% to 76.58 US dollars per barrel when the London markets closed.
The biggest risers on the FTSE 100 were: Melrose Industries, up 5.7p to 159.85p; Endeavor Mining, up 52p to 1,843p; Ocado Group, up 12.3p to 447.4p; Scottish Mortgage Investment Trust, up 14.2p to 670p; and BAE Systems, up 17p to 975p.
The biggest fallers on the FTSE 100 were: British American Tobacco, down 165.5p to 2,823.5p; Schroders, down 18p to 445.4p; Standard Chartered, down 19.6p to 632.4p; HSBC Holdings, down 16.4p to 548.2p; and Legal & General Group, down 6.6p to 228.9p.