British equities drop as interest rate outlook weighs By Pranav Kashyap (Reuters) -London stocks slipped on Friday, tracking losses in Asian markets after robust U.S. economic data spurred worries about interest rates staying high for longer, while National Grid kept losses in check. The blue-chip FTSE 100 index dipped 0.4% and was poised for a […]
British equities drop as interest rate outlook weighs
By Pranav Kashyap
(Reuters) -London stocks slipped on Friday, tracking losses in Asian markets after robust U.S. economic data spurred worries about interest rates staying high for longer, while National Grid kept losses in check.
The blue-chip FTSE 100 index dipped 0.4% and was poised for a fourth consecutive session of decline, its longest losing streak in more than three months. The index was headed for a second straight weekly fall.
The mid-cap FTSE 250 fell 0.3%, also on track for a fourth straight day of losses.
Robust economic data from the U.S. showed business activity in May accelerated to the highest level in over two years. This along with hawkish U.S. Federal Reserve minutes from the last meeting earlier in the week has led traders to dial back their bets on rate cuts this year.
“There’s weak sentiment on the back of concerns the Federal Reserve may not be able to cut interest rates as soon as the market was hoping,” said Fiona Cincotta , senior market analyst at City Index.
Investors also indulged in profit-booking following a near 8% climb in London stocks over the past five weeks. The allure of Britain’s undervalued equities was the key driver for the FTSE’s spirited rally.
“Given the steep increase, it took the FTSE into overbought territory and in order for it to be looking at a correction, it should pull back towards around the 8000 figure,” Cincotta added.
Among stocks, AJ Bell fell 3.6% after the investment platform’s founder sold 7.5 million shares in the company.
National Grid jumped 9.0% after a nearly 11% drop on Thursday.
Mondi gained 2.2% after Citigroup upgraded the stock to “buy” from “neutral”.
Intertek Group was up 1.9% after the product testing firm reconfirmed its forecast for 2024.
British retail sales volumes slid 2.3% in April, compared with a Reuters poll of a 0.4% drop, as wet weather kept shoppers away from clothing retailers and sports stores.
(Reporting by Pranav Kashyap in Bengaluru; Editing by Mrigank Dhaniwala and Eileen Soreng)
