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FTSE 100 posts worst week in nearly four months on rate hike jitters

Published 07/07/2023, 08:28
Updated 07/07/2023, 17:30
© Reuters. FILE PHOTO: People check their mobile phones as they stand outside the entrance of the London Stock Exchange in London, Britain. Aug 23, 2018. REUTERS/Peter Nicholls
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By Shashwat Chauhan and Shristi Achar A

(Reuters) -UK's FTSE 100 fell to near four-month lows on Friday, as investors fret over the possibility of interest rates staying higher for longer, though shares of Coca Cola HBC jumped after the bottler raised its profit outlook.

The internationally-focused FTSE 100 lost 0.3%, totalling to a 3.6% fall for the week, its worst showing in 16 weeks.

The more domestically-focussed FTSE 250 midcap index added 0.5%, led by a 4.6% rise in Elementis (LON:ELM) after JPMorgan (NYSE:JPM) upgraded the chemicals group to "overweight".

Data showed that while the U.S. economy added the fewest jobs in 2-1/2 years last month, wage growth persisted, pointing to a still-tight labour market.

"The latest jobs data really does mean that there is an interest rate hike due for July and there could even be another one still due in September," said Giles Coghlan, chief market analyst at HYCM.

"Although the headline figure has fallen, you can see that the wages component of the print still shows there is more work to be done."

All FTSE 350 sector indexes ended the week lower, as rekindled fears of tighter monetary policy in the United States and weak demand outlook from top commodities consumer China weighed on sentiment.

Bottler Coca Cola HBC AG (LON:CCH) jumped 5.1% on raising its 2023 profit expectation.

Meanwhile, mortgage lender Halifax said British house prices fell last month in annual terms at the fastest rate in 12 years and soaring interest rates are likely to herald more weakness in the housing market.

© Reuters. FILE PHOTO: People check their mobile phones as they stand outside the entrance of the London Stock Exchange in London, Britain. Aug 23, 2018. REUTERS/Peter Nicholls

Housing related sectors like real estate and real estate investment trusts (REITS) lost 0.4% and 0.5% respectively.

OSB Group tanked 28.8%, to the bottom of FTSE 250 after the lender said it would take net income hit as mortgage customers switched from higher rate products.

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