Economic news

FTSE 100 Hits over 7-Month Low as Oil Spike Stokes Inflation Worries

  • Amigo jumps on UK watchdog approval to restart lending
  • Spectris ends $2.4 bln pursuit of Oxford Instruments, shares down
  • FTSE 100 down 2.4%, FTSE 250 off 4.2%


March 7 (Reuters) - London's FTSE 100 stock index hit a more than seven month-low on Monday, with soaring oil prices sparking inflationary concerns across the globe as Western allies mulled a Russian oil import ban.

The blue-chip FTSE 100 fell 2.4% to its lowest since July 2021, with financial and consumer staple stocks leading losses.

Oil prices soared to $130 a barrel after U.S. Secretary of State Antony Blinken said on Sunday that the U.S. and European allies are exploring banning Russian oil imports and delays in Iranian talks. 

Fighting stopped about 200,000 people from evacuating the besieged Ukrainian city of Mariupol for a second day in a row on Sunday, as Russian President Vladimir Putin vowed to press ahead with his invasion unless Kyiv surrendered. 

However, energy and mining stocks jumping 4.0% and 9.3%, respectively, capped losses in the commodity-heavy benchmark index.

"There is a growing fear that the escalated conflict between the two nations would have a fallout on the global economy already struggling to come out of the ravage of the pandemic," said Kunal Sawhney, chief executive officer at research firm Kalkine.

"Investor sentiment has been hit hard. All the hopes of a strong recovery this year have started waning slowly and inflation worries have taken the centerstage."

The FTSE 100 is down 5.4% on the year, but still outperforms the wider European aggregate on rising oil and metal prices.

The domestically focused mid-cap index fell 4.2%, hitting its lowest level since November 2020.

Amigo Holdings Plc jumped 54.6% after the British financial regulator said the sub-prime lender could restart lending if it meets certain conditions and its new business rescue plan is approved by the London High Court. 

Spectris Plc fell 1.2 after the electrical engineering company terminated talks regarding a possible 1.79 billion pound ($2.37 billion) buyout bid for Oxford Instruments.

Reporting by Amal S in Bengaluru; Editing by Rashmi Aich


Source: Reuters

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