Feb 6 (Reuters) – The UK’s FTSE 100 closed decrease on Monday, as upbeat U.S. financial knowledge final week sparked fears of additional financial tightening and as a prime Financial institution of England (BoE) official voiced considerations that charges want to remain greater for longer.
The blue-chip FTSE 100 (.FTSE) fell 0.8% after briefly hitting a brand new file excessive within the earlier session, whereas the domestically-focused FTSE 250 (.FTMC) recorded a close to 1% drop after climbing to an eight-month peak final week.
Almost all main sectors completed within the pink, however treasured metallic miners (.FTNMX551030) eked out a meagre rise of 0.7%.
China-exposed monetary companies agency Prudential (PRU.L) fell practically 5% on considerations round elevated Sino-U.S. geopolitical tensions.
Globally, shares wilted and authorities bond yields rose after final week’s upbeat financial knowledge from america and different economies lessened the chance of recession, but additionally steered charges might need to be hiked additional.
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“Markets are pricing some cuts this yr and I believe that isn’t going to work, that is not going to be what transpires, so there may be room for draw back from right here for equities,” mentioned Vivek Paul, UK chief funding strategist at BlackRock Funding Institute.
BoE rate-setter Catherine Mann backed additional will increase in rates of interest and warned that pausing risked a complicated “coverage boogie” if it turned out charges would want to rise once more.
The Financial institution of England delivered its tenth straight rate of interest hike final week and signalled the tide was handing over its battle in opposition to excessive inflation.
Information on Monday confirmed Britain’s development sector had its worst month in nearly three years in January as rising borrowing prices hit house-building onerous.
Trying forward, the week homes some massive company earnings, together with oil main BP (BP.L), drugmaker AstraZeneca (AZN.L) and client items maker Unilever (ULVR.L).
Amongst particular person shares, Hargreaves Lansdown (HRGV.L) fell 3.3% after Credit score Suisse downgraded the wealth supervisor’s shares to “underperform” from “impartial”.
Reporting by Sruthi Shankar and Shashwat Chauhan in Bengaluru; Enhancing by Subhranshu Sahu, Rashmi Aich and Sharon Singleton
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