- At the end of the week, a sea of red swept across European stock markets
- On a gloomy trading day in London, the FTSE 100 fell 1.3% on Friday
A sea of red flooded European stock markets after central banks dampened hopes that interest rate hikes have come to an end.
On a gloomy trading day in London, the FTSE 100 fell 1.3 percent, or 95.12 points, to 7360.55, and the FTSE 250 fell 1 percent, or 184.76 points, to 17853.09.
The losses were mirrored in Europe, where the main benchmark in Germany lost 0.8 percent and France’s Cac 40 fell 1 percent.
Downward trend: The mood was not helped by the head of the European Central Bank, Christine Lagarde, saying that interest rates will not be cut in the ‘next few quarters’
But Wall Street held firm as the Dow Jones Industrial Average, S&P 500 and Nasdaq all rose about 1 percent in early trading.
The latest bout of unrest came after Federal Reserve Chairman Jerome Powell tried to pour cold water on hopes that interest rates had peaked on Thursday.
“We know that continued progress toward our 2 percent target is not assured,” he said.
“If it appears appropriate to further tighten the policy, we will not hesitate to do so.”
Russ Mould, investment director at AJ Bell, said: ‘Powell recalled that inflation is still well above 2 per cent and the central bank would take action if necessary to keep prices under control.
“In terms of pushbacks, this was more of a mild nudge than a body slam, but it was enough to temper some of the recent exuberance among investors.”
The mood was not helped by the head of the European Central Bank, Christine Lagarde, who said that interest rates will not be cut in the “next few quarters”.
At the same time, official figures showed the British economy stagnating over the summer.
Victoria Scholar, head of investments at Interactive Investor, said: ‘As higher inflation and higher interest rates take their toll, there is a growing risk of a shallow recession in Britain next year as the delayed impact of previous rate hikes begins to take effect. to feel. a path through the economy.
‘Reducing inflation remains the key priority of the government and the Bank of England, even if this comes at the expense of economic growth.’
Oil rose above $80 a barrel again after a sharp decline earlier this week. That lifted BP by 0.5 percent, or 2.5 cents, to 477.85 cents and Shell by 0.6 percent, or 14.5 cents, to 2,629.5 cents.
On the business front, defense group Chemring said its results for the 12 months to the end of October should meet market expectations, including a profit of £67 million. It will invest around £30 million in Norwegian company Nobel, which secured more than £40 million in orders in October on strong demand for energetic materials and devices.
But Chemring also recorded one-off costs on its balance sheet following a strategic review of its US sensors business. Shares fell 1 percent, or 3p, to 2945p.
Defense company Babcock added 4.2 percent, or 17 cents, to 419 cents signed a four-year, £750 million contract with the Ministry of Defense to provide the infrastructure required to support the maintenance of British submarines.
Investors also snapped up shares in rival BAE ahead of the defense giant’s update on Monday.
Markets were unnerved by hundreds of anti-Israel trade unionists blocking access to the company’s weapons factory in Kent.
BAE shares rose 1.2 percent, or 13.5p, to 1,103.5p.
Molten Ventures, the venture capital firm that invests in technology companies, said it expected the value of its portfolio to have fallen in the six months to the end of September due to the economic turmoil. Shares fell 7 percent, or 18.8p, to 250.8p.
Indivior came under more pressure a day after the drug company posted a loss and warned that revenues for Perseris, the shot used to treat adults with schizophrenia, should come in at the lower end of expectations.
The shares, which fell 15 per cent on Thursday, fell 6 per cent, or 83p, to 1293p.