London Markets Archives | Email alerts

Feb. 13, 2018, 12:22 p.m. EST

FTSE 100 ends with a loss, with investors on edge

U.K. inflation sticks at 3%

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, MarketWatch


Getty Images
U.K. shoppers walk on London’s Oxford Street. Annual inflation remained at 3%, data showed Tuesday.

U.K. stocks ended slightly lower Tuesday as investors remained on watch for signs of another sharp selloff, and as U.S. stock markets stumbled.

Stocks continued to waver after a reading on U.K. inflation remained well above the Bank of England’s target.

Mining stocks largely bucked the losing trend, aided by stronger prices for metals.

How did markets perform?

The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.35% closed 0.1% lower at 7,168.01 after moving in and out of positive territory throughout the session. On Monday, the benchmark jumped 1.2%, breaking a two-session losing run.

The basic materials group had the strongest showing among sectors on Tuesday, while utility, telecom and consumer-goods shares were among those that lost ground.

The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.0945%  traded at $1.3891, compared with $1.3837 late Monday in New York.

What drove the markets?

A new round of mild volatility washed over U.K. and European /zigman2/quotes/210599654/delayed XX:SXXP +0.23%  equity markets, which largely started with modest gains before flipping lower. A recovery in U.S. stocks, which often set a lead for U.K. equities, was faltering Tuesday, with the Dow Jones Industrial Average  down more than 80 points during the session.

But gains for metals prices such as copper  and gold  buoyed shares of mining companies listed in London. Metals prices denominated in dollars found strength on the back of a softening in the U.S. dollar /zigman2/quotes/210598269/delayed DXY -0.06% .

What’s was on the economic docket?

The U.K.’s Office for National Statistics on Tuesday said the rate of inflation in January was 3%. That’s the same rate logged in December, and Tuesday’s result was just ahead of a 2.9% consensus estimate from FactSet. The pound spent time above $1.39 after the data.

Inflation is tracked by BOE policy makers in plotting the path of interest rates, with a target of 2% inflation. Last week, the BOE signaled that it could raise interest rates at a faster pace than it previously anticipated, if the global economic recovery and U.K. wage growth continue to strengthen. That message was reiterated Monday in a speech by Bank of England policy maker Gertjan Vlieghe.

Read: A U.K. rate rise in May? Analysts digest hawkish surprise from BOE

What strategists are saying

In the inflation report, “the real head turner turned out to be the core CPI reading, which jumped back to 2.7% to negate last month’s 0.2% fall. With core CPI now back to the joint highest level since 2011, the intense price pressures remain on the BOE to raise rates, with markets factoring in a greater than 50% chance of two or more rate rises in 2018,” said IG market analyst Joshua Mahony in a note.

“Unfortunately for [Bank of England Governor] Mark Carney, his recent reasoning that inflation could rise over the short term due to energy prices appears to be undermined, with the core reading showing that U.K. inflation is on the rise irrespective of energy prices,” said Mahony.

Stocks in focus

TUI AG shares /zigman2/quotes/207049334/delayed UK:TUI +3.03%  rose 1.2% after the vacation-services company posted a narrower net loss of 99.6 million euros ($112.7 million) for the first quarter and backed its full-year guidance.

Among mining stocks, Anglo American PLC /zigman2/quotes/201381512/delayed UK:AAL +1.43%  gained 1.7% and Glencore PLC  /zigman2/quotes/201400686/delayed UK:GLEN +2.67% leapt 2.5%. Randgold Resources PLC , however, turned lower and fell 0.8%.

BHP Billiton PLC shares   /zigman2/quotes/208108397/composite BHP +0.36%   /zigman2/quotes/201448516/delayed AU:BHP +0.70%  picked up 1.8%. The iron-ore producer said it expects to recognize a $1.8 billion income-tax expense to reflect the reduction in the U.S. federal corporate-tax rate and other changes.

Leading decliners on the FTSE 100, water management company Severn Trent PLC /zigman2/quotes/207458310/delayed UK:SVT +0.08%  lost 3.4%, United Utilities Group PLC moved down 3.1% and financial services firm Hargreaves Lansdown PLC  ended 2.6% lower.

/zigman2/quotes/210598409/delayed
UK : FTSE UK
6,914.93
+24.44 +0.35%
Volume: 182,538
April 14, 2021 12:31p
loading...
/zigman2/quotes/210561263/realtime/sampled
US : Tullett Prebon
1.3763
+0.0013 +0.0945%
Volume: 0.0000
April 14, 2021 7:46a
loading...
/zigman2/quotes/210599654/delayed
XX : STOXX
436.74
+0.99 +0.23%
Volume: 0.00
April 14, 2021 1:31p
loading...
/zigman2/quotes/210598269/delayed
US : U.S.: ICE Futures U.S.
91.80
-0.05 -0.06%
Volume: 0.00
April 14, 2021 7:36a
loading...
/zigman2/quotes/207049334/delayed
UK : U.K.: London
388.00 p
+11.40 +3.03%
Volume: 2.13M
April 14, 2021 12:31p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
£4.09 billion
Rev. per Employee
£144,389
loading...
/zigman2/quotes/201381512/delayed
UK : U.K.: London
3,094.50 p
+43.50 +1.43%
Volume: 545,591
April 14, 2021 12:31p
P/E Ratio
24.03
Dividend Yield
2.35%
Market Cap
£37.38 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/201400686/delayed
UK : U.K.: London
294.55 p
+7.65 +2.67%
Volume: 9.76M
April 14, 2021 12:31p
P/E Ratio
N/A
Dividend Yield
2.96%
Market Cap
£38.13 billion
Rev. per Employee
£765,499
loading...
/zigman2/quotes/208108397/composite
US : U.S.: NYSE
$ 70.27
+0.25 +0.36%
Volume: 1.36M
April 13, 2021 4:00p
P/E Ratio
25.43
Dividend Yield
4.44%
Market Cap
$165.17 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/201448516/delayed
AU : Australia: Sydney
$ 46.01
+0.32 +0.70%
Volume: 6.44M
April 14, 2021 4:10p
P/E Ratio
23.17
Dividend Yield
4.49%
Market Cap
$216.69 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/207458310/delayed
UK : U.K.: London
2,395.00 p
+2.00 +0.08%
Volume: 70,253
April 14, 2021 12:30p
P/E Ratio
50.59
Dividend Yield
4.20%
Market Cap
£5.81 billion
Rev. per Employee
£268,575
loading...

Carla Mozée is a reporter for MarketWatch, based in London. Follow her on Twitter @MWMozee.

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.