FTSE 100 close: Barclays surge fails to prevent losses on London index
London’s FTSE 100 slipped today, pushed lower by investors wobbling over concerns about the health of the global economy amid banking and interest rate fears.
The capital’s premier index dropped 0.27 per cent to 7,831.59 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, climbed 0.21 per cent 19,248.01 points.
Concerns about whether the global economy is headed toward a recession have resurfaced in recent days, pushing equities lower.
Traders are seemingly worried central banks will push their respective too hard to squeeze out inflation, engineering a sharp economic slowdown.
US economy data comes in lower than expected
Those anxieties were amplified in London during opening exchnages ahead of fresh GDP figures for the US economy coming out later today.
Analysts reckoned output in the world’s largest economy jumped two per cent in the first three months of this year, which would be a slowdown from the 2.4 per cent expansion in the previous quarter. The growth rate actually trimmed to 1.1 per cent.
London-listed stocks fell “amid uncertainty about the trajectory for the US economy and the knock-on effect worldwide, particularly with banking woes causing so much concern,” Susannah Streeter, head of money and markets at Hargreaves Lansdown, said.
“These numbers do little to put paid to the idea that the Fed is done raising rates further and keep the prospect of another 25bps next week very much on the cards, despite the concern over further banking failures as the likelihood increases that First Republic Bank may well follow SVB and Signature Bank into the annals of US banking failures,” Michael Hewson, chief market analyst CMC Market UK, said.
US Federal Reserve officials have hoisted borrowing costs rapidly over the last year to tame the worst inflation crunch in four decades. Other monetary authorities, including the Bank of England, have followed suit, squeezing global economic activity.
Barclays leads UK bank surge
Those positive results lifted other lenders. HSBC added just over one per cent, while NatWest gained around 0.3 per cent.
Fund managers Legal and General and St James’s Place anchored the London index, each down more than three per cent.
Supermarket Sainsbury’s also shed just over four per cent after it said profits slimmed due to it pumping money into the business to keep down prices.
The pound strengthened about 0.1 per cent against the US dollar.