Markets: FTSE 100 slumps to near three-month low
The FTSE 100 index dipped 0.86 per cent today, closing at 6,904, as financial stocks and mining companies were hammered.
The capital’s premiere index fell to lows of 6,828, down 1.6 per cent compared to the previous close, as concerns about inflation spooked investors. Financial stocks led the declines with Prudential down 8.4 per cent and Standard Chartered Bank tumbling by seven per cent.
Mining stocks also took a hit with Anglo American falling 4.7 per cent.
The index was lifted this afternoon by news that the US would reopen its border to vaccinated EU and UK travellers which boosted aviation and helped to stem losses. International Consolidated Airlines jumped by 11.2 per cent while Rolls Royce, which makes engines for long-haul airplanes, climbed by 4.2 per cent.
FTSE 250
The mid-cap FTSE 250 index closed down by 1.1 per cent at 23,402 points.
The lifting of travel restrictions came as a major boost for SSP which led gains for the index, jumping by 5.9 per cent. EasyJet was also treated to a rise in share price of 3.8 per cent.
However, it was not enough to stem losses led by the insurance and energy deal finding website, MoneySuperMarket.com which shed 9.1 per cent.
Analysts Say
Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdown said, “the travel sector may be flying into brighter skies, helping the FTSE 100 claw back some losses, but still nervousness hangs over the financial markets, with inflation worries nagging investors, particularly with gas prices sky high.
“There may be pockets of recovery right now, as Covid restrictions ease, but it’s feared the global economy could now be hit by a fresh barrage of problems,” she added.
Danni Hewson AJ Bell financial analyst, comments on the market movements. He said, “global uncertainty is taking a toll on markets that have enjoyed a fairly smooth run this year despite everything that’s been happening, but that uncertainty creates dips, and those dips create opportunity if the price is really right.”
Forward look
Investors now await the Bank of England’s policy meeting this week for a timeline on its plan to ease its massive pandemic stimulus against the backdrop of rising inflation pressures from supply chain disruptions and higher energy prices.
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