Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

FTSE 100 hits 1-week low amid broader gloom, GSK surges

Published 07/12/2022, 09:07
Updated 07/12/2022, 17:45
© Reuters. FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville

© Reuters. FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville

By Johann M Cherian and Shristi Achar A

(Reuters) -Britain's FTSE 100 slipped to one-week lows on Wednesday, dragged down by cyclical sectors amid growing worries about a recession, while GSK marked its best day since 2008 after the dismissal of U.S. lawsuits relating to heartburn drug Zantac.

The blue-chip index closed down 0.4%, its weakest level since Nov. 29.

Oil & gas, industrial miners, chemical and banks - among sectors considered as more economically sensitive - led the declines.

Wall Street's main indexes also came under pressure following warnings of a looming recession from major U.S. bankers this week and upbeat economic data that fed into fears of aggressive policy tightening by the Federal Reserve.

"Globally, what markets are seeing is this tug of war between macro data coming in a little bit better than expected in the US, and the underlying assumption that perhaps inflation has peaked," said Richard Flax, chief investment officer at Moneyfarm.

"It is expected that central bank policy won't need to be revised upwards from where it is."

The Bank of England looks set to raise interest rates to 3.5% or more next week, but policymakers appear increasingly split on how much tightening is needed to tame double-digit inflation as the economy heads into recession.

Financial markets currently price in a 78% chance that the BoE will raise rates by half a percentage point to 3.5% on Dec. 15, and a 22% chance of a rise to 3.75%.

GSK Plc jumped 7.5% after the drugmaker was spared thousands of U.S. lawsuits claiming that the heartburn drug Zantac caused cancer.

The pharmaceutical sector rose 2.7%, posting its biggest one-day percentage gain in almost five months.

"Shareholders in pharmaceutical giant GSK got some timely pain relief. This outcome is probably the best GSK could have hoped for given how comprehensively the judge in the case dismissed the plaintiffs' arguments," said AJ Bell investment director Russ Mould.

© Reuters. FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville

Mitchells & Butlers (LON:MAB) Plc gained 6.5% after the pub and restaurant group posted a 53% jump in annual profit as it said recent sales in the new fiscal year were encouraging.

However, the FTSE 250 midcap index dropped 0.9%.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.