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FTSE 100 retreats from two-week high on slowdown worries

Economy Jun 29, 2022 17:10
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© Reuters. FILE PHOTO: Pedestrians leave and enter the London Stock Exchange in London, Britain August 15, 2017. REUTERS/Neil Hall

By Amal S and Boleslaw Lasocki

(Reuters) -Britain's top share index inched lower on Wednesday, as gains in healthcare shares were seen providing little support against growing concerns about a global recession.

After falling as much as 0.8%, the blue-chip FTSE 100 index recouped some losses to close 0.2% lower in choppy trading. The index touched a two-week high in the previous session.

"The FTSE is indicative of the markets at the moment - nobody knows what to do and there is no real conviction behind trading," said Stuart Cole, head macro economist at Equiti Capital.

"We all know inflation is high, growth is at risk, interest rates are going higher, but we don't really know how things will pan out as the authorities react to all this."

Rising worries of an economic slowdown weighed heavily on cyclical stocks, while miner Anglo American (LON:AAL) and spirits maker Diageo (LON:DGE) dropped 1.7% and 2.8%, respectively, after Deutsche Bank (ETR:DBKGn) cut its ratings for both companies.

Further losses were limited by gains in drugmakers AstraZeneca (NASDAQ:AZN) and GSK, boosting the broader healthcare sector by 2.0%.

The index has dropped nearly 1% so far this year, but outperformed its global peers due to a large presence of resource-focused companies, which have benefited from a surge in energy and commodity prices.

The British economy is struggling with the risks of recession and soaring inflation, which is nearing double-digit territory, while the Bank of England is expected to raise interest rates again in August.

Those fears have weighed on the FTSE 100 recently, with the blue-chip index tracking its worst quarterly performance since September 2020.

Meanwhile, Bank of England Governor Andrew Bailey said that the central bank had other options beyond being ready to act "forcefully" if needed to tackle inflation.

The domestically focussed mid-cap FTSE 250 fell 1.6%, snapping a three-day winning streak.

United Utilities and National Grid (LON:NG) rose 2.0% and 0.8%, respectively, after British energy regulator Ofgem proposed a 20.9 billion pounds ($25.48 billion) package to boost grid capacity.

Shares of Lookers jumped 3.2% after the automotive aftersales company hiked its full-year outlook on the back of vehicle shortages.

FTSE 100 retreats from two-week high on slowdown worries
 

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Comments (2)
Zahid Khan
Zahid Khan Jun 30, 2022 8:09
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FTSE should come down.. but it’s still holding above 7000. US indicies down far more than FTSE. USA weak ? Or UK market strong?
Purnchandra Patil
Purnchandra Patil Jun 29, 2022 17:16
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SLOWDOWN WORRIES FOR INDIAN MKT
Howard Moore
Howard Moore Jun 29, 2022 17:16
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Thought you were in England...I'd like a Balti please.? Can afford it due to this scaremongering false story. FTSE 100 down -0.15%. Total you know what. Why does anyone believe these different agendas?
 
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