London markets flopped today driven by investors fretting over the global economic downturn.
The capital’s premier FTSE 100 index dropped 1.63 per cent to 7,039.81 points, while the mid-cap domestically-focused FTSE 250 index, which is more aligned with the health of the UK economy, tumbled 1.23 per cent to 18,480.66 points.
Recession fears have led investors’ decision making for several weeks caused by expectations businesses and households will curb activity in response to inflation across the developed world surging to levels not seen for a generation.
The International Monetary Fund warned yesterday the global economic outlook has “darkened,” knocking market sentiment.
Scorching inflation prints in the UK, America and other rich nations have prompted central banks to rein in monetary policy for the first time in decades, heaping pressure on stocks.
Industrial giants led the FTSE 100 lower, driven by a slide in commodity prices on fears of demand shrinking amid the global economic slowdown.
Miners Fresnillo, Anglo American and Antofagasta all shed more than five per cent.
Oil prices softened, with the global benchmarks WTI Crude and Brent Crude each losing around two per cent to trade below $100 per barrel.
The pound continued to slide against the dollar, weakening around 0.7 per cent to buy $1.1805, weighed down by a bets mounting on the Federal Reserve hiking rates 75 basis points for the second successive meeting later this month.
Some even think the Fed co will sign off a historic full percentage point increase to crush inflation, which is running at a 40-year high of 9.1 per cent.