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FTSE 100 closes lower under impact of baby formula fine

Published 15/03/2024, 08:37
© Reuters. FILE PHOTO: Signage for the London Stock Exchange Group is seen outside of offices in Canary Wharf in London, Britain, August 3, 2023. REUTERS/Toby Melville/File Photo
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By Shristi Achar A, Pranav Kashyap and Sruthi Shankar

(Reuters) -A 13% slide in Reckitt Benckiser (LON:RKT) shares dragged the UK's blue-chip index lower on Friday, after one of its units was fined in a lawsuit related to its baby formula.

Reckitt's stock recorded its biggest percentage drop in more than two decades after an Illinois jury ordered its unit Mead Johnson to pay $60 million to the mother of a premature baby who died of an intestinal disease after being fed Enfamil.

The FTSE 100 index of top British firms dipped 0.2%, in an otherwise uneventful session.

"It's not simply the size of this payout which has caused nervousness, but the fact a long line of other lawsuits are pending, which could mount up to be huge sum for the company," said Susannah Streeter, head of money and markets, Hargreaves Lansdown (LON:HRGV).

The UK's domestically oriented FTSE 250 edged up 0.1% on Friday but recorded modest weekly losses.

UK markets tracked a dour mood globally after hotter-than-expected U.S. inflation readings this week dampened expectations of an early rate cut from the U.S. Federal Reserve, potentially setting the tone for other central banks.

The British public's expectations for the pace of inflation over the coming year have fallen over the last three months, a Bank of England (BoE) survey showed, which may reassure policymakers who are considering when to cut interest rates.

The BoE is expected to keep rates on hold at 5.25% next Thursday, with market pricing favouring the BoE cutting rates slightly slower than the European Central Bank and Fed this year.

Despite its dip on Friday, the FTSE 100 ended the week higher, snapping three straight weeks of losses as domestic data showed slowing wage growth and the economy returning to growth in early 2024.

© Reuters. FILE PHOTO: Signage for the London Stock Exchange Group is seen outside of offices in Canary Wharf in London, Britain, August 3, 2023. REUTERS/Toby Melville/File Photo

Vodafone (LON:VOD) jumped 5.7% after Swisscom said it will buy Vodafone Italia for 8 billion euros ($8.70 billion) to merge the business with its Italian subsidiary Fastweb.

($1 = 0.7847 pounds)

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