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Miners Drag UK'S FTSE 100 Lower after Hawkish ECB; GSK rises

  • FTSE 100 down 0.9%, FTSE 250 off 1.0%
  • GSK rises on RSV vaccine success in late-stage trial

June 10 (Reuters) - UK's top stock index fell nearly 1% on Friday, with miners leading the losses after parts of Shanghai announced fresh COVID-19 curbs, while GSK rose as its respiratory vaccine succeeded in a late-stage trial for older adults.

The blue-chip FTSE 100 index was down 0.9%, while the domestically oriented FTSE 250 index declined 1.0%. The indexes were set for weekly losses of 1.8% and 2%, respectively.

All sectors were in the red, with miners shedding 2.3% as industrial metals retreated after renewed COVID-19 restrictions in top consumer China rekindled demand worries.

The European Central Bank said on Thursday it would deliver its first rate hike since 2011 next month, followed by a potentially larger move in September. 

"Inflation is what's scaring the horses on financial markets and equities... The ECB's decision yesterday was a fresh jolt for markets and another sign that the cheap money journey is hurtling abruptly to an end," said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

"We deem the ECB to be rather optimistic on growth... whereas we expect a sharp downturn at the end of the year and into 2023, with the bloc's economy getting close to recession at the turn of the year," Morgan Stanley researchers wrote in a note.

Next week, the Bank of England will likely raise rates for the fifth time since December as near-10% inflation, the worst cost-of-living squeeze in decades, and planned labour strikes threaten a summer of discontent in Britain. 

Investors' focus was also on the highly anticipated U.S. inflation data due later in the day, which could guide the Federal Reserve's tightening path in the months to come. The Fed will also be holding a key rate-setting meeting next week.

GSK rose 1.1% after the drugmaker said its vaccine for respiratory syncytial virus was successful in a late-stage trial involving adults aged 60 years and older.

Reporting by Anisha Sircar in Bengaluru; editing by Uttaresh.V

Source: Reuters

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