Bulletin
Investor Alert

London Markets Archives | Email alerts

Feb. 28, 2018, 12:36 p.m. EST

FTSE 100 ends lower, hampered by prospect of faster Fed rate hikes

China data hits miners; Taylor Wimpey shares rise

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    FTSE 100 Index (UKX)
  • X
    British Pound (GBPUSD)
  • X
    STOXX Europe 600 Index (SXXP)

or Cancel Already have a watchlist? Log In

By Carla Mozee and Victor Reklaitis, MarketWatch

The FTSE 100 drops in February.

U.K. stocks closed lower Wednesday, finishing up February with a monthly loss, as investors focused on the prospect of rising borrowing costs in the U.S. after comments from new Federal Reserve Chairman Jerome Powell.

A slowdown in factory activity in China, a key market for London-listed metals producers, also put pressure on London’s benchmark.

How markets are moving

The FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +1.19% fell 0.7% to end at 7,231.91. On Tuesday, the London gauge slipped 0.1%.

For February, the FTSE 100 gave up 4%. That marked its worst monthly performance since August 2015, according to FactSet.

The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.5603% fetched $1.3792, down from $1.3908 late Tuesday in New York, as traders eyed news about a European Union document laying out Brexit terms. It was helping to reignite a debate over Northern Ireland’s future.

What’s driving markets

U.K. blue-chip equities came under pressure, echoing action on European /zigman2/quotes/210599654/delayed XX:SXXP +0.73%  and Asian markets /zigman2/quotes/210597971/delayed JP:NIK +0.65%   /zigman2/quotes/210598030/delayed HK:HSI -1.49%  , after a selloff in stocks on Wall Street on Tuesday. U.S. stocks were mixed on Wednesday, midway through their session.

Those losses came after the Fed’s Powell told congressional lawmakers that the U.S. economic outlook has strengthened since December. That was interpreted as a sign the Fed may raise interest rates four times this year, instead of three times as it has previously signaled. Powell will testify before the Senate Banking Committee on Thursday.

Read: 4 financial-market takeaways from Fed chief Jerome Powell’s debut

Persistent worries about higher borrowing rates have unsettled global markets this month, contributing to the FTSE 100’s likely loss for February. Investors focus on U.S. yields and Fed-rate policy, as higher U.S. interest rates tend to drive financial markets globally and as many companies do business in the U.S.

Click to Play

Jerome Powell: Economic outlook has improved

In his first appearance before Congress as Federal Reserve Chairman, Jerome Powell said he's become more optimistic about the U.S. economy this year. Photo: Getty Images

Powell’s testimony helped drive the dollar /zigman2/quotes/210598269/delayed DXY -0.44%  higher, which in turn pressed down on prices of metals denominated in the U.S. currency, such as copper  . U.K. stocks of miners dropped Wednesday, tracking that move lower.

The mining sector was also under pressure from data showing the pace of growth in China’s manufacturing activity fell sharply in February . China is a major buyer of both industrial and precious metals.

What strategists are saying

“It is becoming increasingly clear that global stocks still remain highly sensitive to the prospects of rising inflation and interest-rate fears. With Powell’s testimony fuelling market speculation of higher U.S. interest rates this year, stock markets remain exposed to downside risks, as equity bears lurk in the background,” said Lukman Otunuga, research analyst at FXTM, in a note.

Stock movers

ITV PLC shares /zigman2/quotes/205378065/delayed UK:ITV +3.14%  slid 7.6% after the broadcaster’s pretax profit of £500 million ($697.1 million) fell short of a FactSet consensus estimate of £558 million.

Taylor Wimpey PLC shares  dropped 4% as the home builder posted a 6.9% fall in 2017 pretax profit.

Admiral Group PLC shares /zigman2/quotes/201079056/delayed UK:ADM +1.26%  fell 4.6%. They erased an earlier gain that came as the insurance company announced its 2017 profit rose 45%.

In the mining group, Anglo American PLC /zigman2/quotes/201381512/delayed UK:AAL +1.63%  fell 3.3%, Antofagasta PLC  /zigman2/quotes/200173667/delayed UK:ANTO -0.18%  lost 4% and BHP Billiton PLC   /zigman2/quotes/208108397/composite BHP +2.20%   /zigman2/quotes/201448516/delayed AU:BHP +1.29%  shed 2.7%.

Shares in Tesco PLC /zigman2/quotes/203761082/delayed UK:TSCO +2.04%  closed 1.8% higher after the supermarket chain said its shareholders and Booker Group PLC  holders approved the companies’ $5.5 billion merger.

In other developments, electronics retailer Maplin and Toys R US UK have each collapsed into administration , according to media reports Wednesday, putting roughly 5,500 jobs from both companies at risk.

/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,389.98
+87.24 +1.19%
Volume: 722,321
May 20, 2022 4:56p
loading...
/zigman2/quotes/210561263/realtime/sampled
US : Tullett Prebon
1.2563
+0.0070 +0.5603%
Volume: 0.0000
May 23, 2022 1:52a
loading...
/zigman2/quotes/210599654/delayed
XX : STOXX
431.10
+3.11 +0.73%
Volume: 0.00
May 20, 2022 11:03p
loading...
/zigman2/quotes/210597971/delayed
JP : Nikkei
26,912.80
+173.77 +0.65%
Volume: 0.00
May 23, 2022 2:32p
loading...
/zigman2/quotes/210598030/delayed
HK : Hong Kong Exchange
20,408.89
-308.35 -1.49%
Volume: 955,485
May 23, 2022 1:37p
loading...
/zigman2/quotes/210598269/delayed
US : U.S.: ICE Futures U.S.
102.69
-0.46 -0.44%
Volume: 0.00
May 23, 2022 1:42a
loading...
/zigman2/quotes/205378065/delayed
UK : U.K.: London
71.52 p
+2.18 +3.14%
Volume: 12.32M
May 20, 2022 4:35p
P/E Ratio
7.67
Dividend Yield
4.61%
Market Cap
£2.86 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/201079056/delayed
UK : U.K.: London
2,174.00 p
+27.00 +1.26%
Volume: 586,150
May 20, 2022 4:35p
P/E Ratio
10.93
Dividend Yield
12.83%
Market Cap
£6.52 billion
Rev. per Employee
£136,604
loading...
/zigman2/quotes/201381512/delayed
UK : U.K.: London
3,523.50 p
+56.50 +1.63%
Volume: 2.92M
May 20, 2022 4:35p
P/E Ratio
7.10
Dividend Yield
6.08%
Market Cap
£47.13 billion
Rev. per Employee
£474,259
loading...
/zigman2/quotes/200173667/delayed
UK : U.K.: London
1,422.50 p
-2.50 -0.18%
Volume: 1.25M
May 20, 2022 4:35p
P/E Ratio
14.96
Dividend Yield
8.04%
Market Cap
£14.02 billion
Rev. per Employee
£201,170
loading...
/zigman2/quotes/208108397/composite
US : U.S.: NYSE
$ 67.32
+1.45 +2.20%
Volume: 4.34M
May 20, 2022 4:00p
P/E Ratio
10.26
Dividend Yield
10.40%
Market Cap
$167.84 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/201448516/delayed
AU : Australia: Sydney
$ 47.79
+0.61 +1.29%
Volume: 6.36M
May 23, 2022 3:32p
P/E Ratio
10.75
Dividend Yield
10.04%
Market Cap
$238.80 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/203761082/delayed
UK : U.K.: London
260.30 p
+5.20 +2.04%
Volume: 22.68M
May 20, 2022 4:35p
P/E Ratio
13.40
Dividend Yield
4.19%
Market Cap
£19.62 billion
Rev. per Employee
£177,294
loading...

Carla Mozée is a reporter for MarketWatch, based in London. Follow her on Twitter @MWMozee. Victor Reklaitis is a London-based markets writer for MarketWatch. Follow him on Twitter @VicRek.

Get news alerts on British Pound — or create your own.
This Story has 0 Comments
Be the first to comment
More News In
Markets

Story Conversation

Commenting FAQs »

Partner Center

World News from MarketWatch

Link to MarketWatch's Slice.