FTSE 100 retreats from two-week high on slowdown worries

06/29/2022 | 05:05am

(For a Reuters live blog on U.S., UK and European stock markets, click or type LIVE/ in a news window)

* Lookers rise on upbeat profit outlook

* Anglo American, Diageo fall on Deutsche Bank downgrades

* Cyclicals lead losses

* FTSE 100 down 0.2%, FTSE 250 off 1.6%

June 29 (Reuters) - Britain's top share index inched lower on Wednesday, as gains in healthcare shares were seen providing little support against growing concerns about a global recession. After falling as much as 0.8%, the blue-chip FTSE 100 index recouped some losses to close 0.2% lower in choppy trading. The index touched a two-week high in the previous session.

"The FTSE is indicative of the markets at the moment - nobody knows what to do and there is no real conviction behind trading," said Stuart Cole, head macro economist at Equiti Capital. "We all know inflation is high, growth is at risk, interest rates are going higher, but we don't really know how things will pan out as the authorities react to all this."

Rising worries of an economic slowdown weighed heavily on cyclical stocks, while miner Anglo American and spirits maker Diageo dropped 1.7% and 2.8%, respectively, after Deutsche Bank cut its ratings for both companies.

Further losses were limited by gains in drugmakers AstraZeneca and GSK, boosting the broader healthcare sector by 2.0%.

The index has dropped nearly 1% so far this year, but outperformed its global peers due to a large presence of resource-focused companies, which have benefited from a surge in energy and commodity prices. The British economy is struggling with the risks of recession and soaring inflation, which is nearing double-digit territory, while the Bank of England is expected to raise interest rates again in August.

Those fears have weighed on the FTSE 100 recently, with the blue-chip index tracking its worst quarterly performance since September 2020.

Meanwhile, Bank of England Governor Andrew Bailey said that the central bank had other options beyond being ready to act "forcefully" if needed to tackle inflation.

The domestically focussed mid-cap FTSE 250 fell 1.6%, snapping a three-day winning streak.

United Utilities and National Grid rose 2.0% and 0.8%, respectively, after British energy regulator Ofgem proposed a 20.9 billion pounds ($25.48 billion) package to boost grid capacity.

Shares of Lookers jumped 3.2% after the automotive aftersales company hiked its full-year outlook on the back of vehicle shortages. (Reporting by Boleslaw Lasocki in Gdansk and Amal S in Bengaluru; Editing by Uttaresh.V, Sherry Jacob-Phillips and Alex Richardson)

© Reuters 2022
Copier lien
Latest news about "Economy & Forex"
3m ago
11m ago
17m ago
17m ago
17m ago