The UK’s leading share index fell to its lowest level in about two months on Monday as worries over inflation and rising bond yields took their toll on global equity markets.
The FTSE 100 index of leading shares fell 1.1 per cent on Monday morning, while the mid-cap FTSE 250 index declined 1.3 per cent. The FTSE 100 is down more than 4 per cent this year partly weighed down by a continued recovery in the pound from its post-Brexit lows.
Internationally focused companies had previously seen their stock prices buoyed by a weak pound that boosted revenues made in other currencies.
On Monday, the blue-chip index was on track for its fifth consecutive day of losses, its longest losing streak since November, in a broad-based sell-off. Only a handful of stocks were trading in positive territory.
“Equity nervousness seems to be about repricing for higher yields and tighter Fed policy and the fear that the bond market has broken out of its three-decade bull market,” said Neil Wilson, analyst at ETX Capital in London.
Asian shares fell the most in over a year on Monday as fears of resurgent inflation battered bonds toppled Wall Street from record highs and sparked speculation that central banks globally might be forced to tighten policy more aggressively.
Shares in miners Anglo American and Glencore rose 1 and 0.3 per cent respectively as the sector found support in a rebound in metal prices.
Randgold rose in early trading after the African gold miner reported 2017 profit up 14 per cent thanks to increased production and said it would double its annual dividend.
Its shares, however, succumbed to the broader weakness, turning 1 per cent lower.
An outperformer was Kingfisher, which rose 1.9 per cent to the top of the FTSE.
Traders said the stock was supported by hopes for an easing of competition after rival Wesfarmers wrote off British hardware chain Homebase for more than its purchase price, saying it had made a series of mistakes.
Tesco fell 0.6 per cent, outperforming the broader market.
Britain’s biggest retailer forecast profit for the full 2017/18 year slightly ahead of analysts’ expectations and confirmed it would pay a final dividend.
Ryanair fell more than 3 per cent.
The airline posted a 12 per cent rise in fourth-quarter profit but warned of possible further disruption by pilots and said it was not optimistic about average fares in European short-haul in the summer.
Financials and consumer staple stocks were the biggest weight to the FTSE, taking a combined 26 points off the blue-chip index.
Reuters
