London stocks fall as UK annual inflation tops 10% – Reuters UK

Signage is seen outside the entrance of the London Stock Exchange in London, Britain. Aug 23, 2018. REUTERS/Peter Nicholls
Aug 17 (Reuters) – London stocks fell on Wednesday, with the FTSE 100 index snapping a three-day winning streak after data showed British consumer price inflation jumped to 10.1% in July, raising bets about more aggressive interest rate hikes by the Bank of England.
The blue-chip index (.FTSE) ended 0.3% lower, dragged down by declines in insurers and bank stocks.
Persimmon (PSN.L) slid 7.8% after the housebuilder posted a fall in half-yearly profit. read more
Official figures showed consumer price inflation jumped to a higher-than-expected 10.1% in July, its highest since February 1982, and up from an annual rate of 9.4% in June as surging food costs intensified a squeeze on household budgets. read more
The data fuelled bets by investors that the Bank of England will keep on hiking interest rates quickly, with markets now pricing in an 85% chance of a half percentage-point rate interest hike in September.
"We now see risks tilted to an even more front-loaded and protracted hiking cycle with inflation expectations increasingly at risk of destabilising further in the coming months," Sanjay Raja, senior economist at Deutsche Bank wrote in a note.
"We see the peak in inflation delayed to next year with inflation likely to remain in double digits at least until late Q2-2023."
Still, the FTSE 100 has gained nearly 1.8%, outperforming Europe's STOXX 600 (.STOXX) and U.S. S&P 500 (.SPX) index, due to its exposure to commodity-linked stocks and global firms.
"We remain constructive on the UK market in a backdrop of high commodity prices, while many large-cap value and defensive names can perform well in the current macro environment," said Hussain Mehdi, investment strategist at HSBC Asset Management.
The domestically focused FTSE 250 midcap index (.FTMC) closed 1.5% lower, easing off two-month highs.
Infrastructure firm Balfour Beatty (BALF.L) jumped 10.5% after posting a 42% rise in underlying operating profit in the first half and announcing a hike in dividend.
Cineworld (CINE.L) plunged 60.4% to a record low after the world's second-largest cinema chain warned that admission levels at its theatres are likely to stay lower than expected until November due to limited film releases. read more
Our Standards: The Thomson Reuters Trust Principles.
A memorial service in Zimbabwe for Queen Elizabeth drew a handful of mourners on Thursday but some on the streets of the capital said she was a symbol of British colonial rule that should not be celebrated.
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile.
Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.
© 2022 Reuters. All rights reserved

source

Leave a Comment