Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

FTSE 100 posts first quarterly drop since September 2020

Stock Markets Jun 30, 2022 17:00
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A worker shelters from the rain under a Union Flag umbrella as he passes the London Stock Exchange in London, Britain, October 1, 2008. REUTERS/Toby Melville

By Devik Jain

(Reuters) -London's FTSE 100 fell on Thursday and recorded its first quarterly drop since September 2020, as concerns grew that prolonged inflationary pressures would force central banks to act aggressively, leading to a global economic downturn.

The blue-chip index dropped 2.0% and posted its biggest monthly decline since March 2020. Still, its exposure to commodity-linked firms and global companies helped it outperform its global peers this year.

"The FTSE 100 has very little to do with the UK economy itself, so the local recession is less impactful," said Azad Zangana­, a senior European economist and strategist at Schroders (LON:SDR).

"But if we were to see a global recession, we would eventually see a hit to demand for commodities, so that area could potentially suffer."

The domestically focused mid-cap FTSE 250 index declined 2.0%, shedding 11.7% in the June quarter, as investors price in lower UK economic growth and corporate profits because of soaring inflation, which the Bank of England expects to exceed 11% in October.

The FTSE 250 index is already in a bear market, down more than 23% after scaling a record closing high in September 2021.

Britain's economy grew by an expected 0.8% in the first quarter, but risks shrinking in the second quarter due to a hit to demand as inflation jumped to a 40-year high of 9.1%.

Miner Anglo American (LON:AAL) and retailer B&M European Value Retail fell more than 5% to lead losses on the FTSE 100.

Heavyweight oil companies BP (LON:BP) Plc and Shell (LON:RDSa) slipped 2.4% and 2.3%, respectively, while industrial metal and mining stocks also dropped.

HSBC Holdings (LON:HSBA), Lloyds (LON:LLOY) and Natwest (LON:NWG) Group fell between 1.3% and 3.0% after Barclays (LON:BARC) cut its price targets for the stocks.

Bunzl (LON:BNZL) Plc gained 1.8% after the business supplies distributor said it expected higher annual revenue, benefiting from red-hot inflation and acquisitions in the last year.

FTSE 100 posts first quarterly drop since September 2020
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email