Economic news

London Shares Inch Lower; Oil Rally Fuels Inflation Concerns

Sept 8 (Reuters) - London's benchmark FTSE 100 was little changed ​on Tuesday as oil prices hit multi-week highs and dampened risk appetite ‌in a week packed with economic data, while gains in energy stocks limited broader declines.

The blue-chip FTSE 100 index fell 0.6% to 10,816.59 points by 1022 GMT, while the mid-cap FTSE 250 ​slipped 0.24%.

  • Yemen's Tehran-backed Houthis attacked energy facilities in Saudi Arabia, in a major ​expansion of the ongoing conflict, sending Brent crude to near $99 a barrel.

  • Energy ⁠stocks in London rose, with BP and Shell up 1.5% and 0.7%, respectively.

  • Rising ​oil prices have reinforced inflation concerns, pushing global bond yields to multi-month highs last week. ​Stocks took a beating and markets reassessed interest rate hike expectations.

  • Traders are pricing in a 60% chance of a U.S. rate hike next week, while they expect the Bank of England to ​remain on hold, according to LSEG data.

  • A key U.S. inflation report this week and ​economic growth data in the UK could influence these bets heading into next week.

  • Heavyweight banks fell ‌0.8%, ⁠the biggest weights in the market.

  • Consumer-focused sectors took a hit on Tuesday. Dunelm tumbled 12.5% after the homeware retailer issued a profit warning for 2027, citing hot summer weather.

  • The stock was the biggest loser on the mid-cap index, and weighed down the retailers sector, ​which lost 0.9%.

  • Personal ​goods also lost 1.5% ⁠after data showed British retail sales growth slowed to a four-month low in August.

  • Miners Antofagasta and Glencore gained 3.6% and 1.2% after ​copper prices hit a record high. The industrial metal miners ​sector gained ⁠1%.

  • Among others, Computacenter bottomed the FTSE 100 with a 3.8% fall. The technology service provider hit a record high earlier in the session after it said annual profit would top ⁠market expectations.

  • Separately, ​British retailers said that they would seek to create 100,000 ​jobs for young people not in employment or education by the time of the next national election ​due in 2029.

Reporting by Anand Gopal and Purvi Agarwal in Bengaluru; Editing by Maju Samuel

Source: Reuters


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