Thursday, October 28

FTSE 100 slips as slowdown worries, inflation fears persist


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London’s FTSE 100 followed Asian stocks lower on Friday as concerns about a slowdown in global economic growth outweighed a jump in AstraZeneca shares after a positive trial update.

AstraZeneca jumped 2.7% to top the FTSE 100 after trials of its prostate cancer drug Lynparza showed positive results.

The blue-chip FTSE 100 index eased 0.4%. Retailers, industrial miners and life insurers were the top losers.

The index has gained nearly 1.3% so far this week, heading for its best week in a month, with the energy sector leading the rally followed by travel, which gained on support from easing global restrictions.

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However, growing worries over energy bills, food costs and taxs prompted a hefty drop in British consumer confidence this month as people became more downbeat about the economic outlook.

“With the falling consumer confidence, there is a potential likelihood of a major drop in consumer spending that was anticipated to start with the upcoming holiday period,” said Kunal Sawhney, chief executive officer at Kalkine.

“As most of the businesses are eagerly looking forward to reviving their commercial operations, they will have to struggle again with the reduced footfalls and subsequently low spending.”

UK’s benchmark bond yields jumped to their highest since May 2019, signaling rising inflation pressures.

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The FTSE 100 has gained nearly 9.3% so far this year on higher energy prices and accommodative central bank policies.

However, it has significantly underperformed a 17% rise in its European peers as worries over slowing economic growth coupled with higher inflation pressures weighed on investor sentiment.

The domestically focussed mid-cap index fell 0.6%, with travel stocks leading the decline.

British outsourcer Mitie Group rose 2.1% after it raised its fiscal 2022 profit forecast.

Land Securities fell 0.4% after saying it sold two retail parks for 54.3 million pounds ($74.51 million) as part of a plan to exit its non-core businesses. (Reporting by Shashank Nayar in Bengaluru; Editing by Saumyadeb Chakrabarty and Subhranshu Sahu)

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