Economic news

London Shares Extend Losses ahead of ECB Meet; Energy Stocks Shine

  • FTSE 100, FTSE 250 off 0.6%
  • Energy stocks outperform
  • AO World to close German business; shares fall

June 9 (Reuters) - UK's FTSE 100 slipped for a third straight session on Thursday, as cautious investors braced for the impact of more interest rate hikes ahead of a key European Central Bank meeting later in the day.

The blue-chip index and the midcap FTSE 250 index were down 0.6% each.

The ECB in a decision due at 11:45 a.m. GMT is likely to announce it is pulling the plug on years of stimulus and signal a string of rate rises to fight surging inflation.

"Although no action is expected with regards to interest rates, participants may be on the lookout for hints over how the bank plans to move in months to come," said Charalambos Pissouros, head of research at JFD Brokers.

Investors have ramped up bets of rate hikes by the ECB and the Federal Reserve in recent days, which is negative for equities, Pissouros added.

Asian shares declined, while broader European stocks were down 0.8% and U.S. bond yields inched up.

Energy was the sole sector in the black, rising 0.3%, as crude prices cheered China's stronger-than-expected May exports but soon gave up most of the gains.

UK's energy shares have outperformed by a wide margin so far this year, surging 63% driven by a commodity price rally, while most other sectors have declined as threats of a slowdown loom large.

Britain's housing market showed signs of a slowdown last month, as fast-rising inflation and higher rates tightened the financial squeeze for many households, a survey showed.

British online electricals retailer AO World fell 2.5% on plans to close its German business. 

Fuller, Smith & Turner rose 1.8%, after saying it was seeing steady growth in its weekly sales, and as the pub and hotel operator returned to a profit. 

Reporting by Anisha Sircar in Bengaluru; Editing by Shailesh Kuber and Rashmi Aich

Source: Reuters

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