FTSE 100 drops while industrial stocks boost mid-caps
London’s FTSE 100 dipped this morning after a fall in heavyweight oil majors BP and Royal Dutch Shell dragged down the index.
The blue-chips fell by 0.5 per cent at the open, with oil dips offsetting gains in large dollar-earning consumer staples firms including Unilever and Diageo.
These companies benefitted from a weaker pound, as sterling extended its fall against the dollar today, dropping bellow $1.39.
Meanwhile, the domestically focused mid-cap FTSE 250 rose by 0.1 per cent to snap a three-day losing streak, boosted by industrial stocks.
Among industrials, Rotork climbed 1.9 per cent and was one of the biggest gainers after Morgan Stanley upgraded the stock to “overweight”.
Meanwhile, British retail sales fell unexpectedly by 1.4 per cent last month as Brits swapped supermarkets for restaurants amid easing lockdown restrictions.
Market movers
The morning’s biggest winner was credit checker Experian, who rose 2.8 per cent, followed by Rolls-Royce, up by 1.9 per cent.
Betting firm Flutter Entertainment and safety equipment company Halma also rose by 1.8 per cent and 1.7 per cent respectively.
Royal Dutch Shell was the morning’s biggest faller, dropping by 3.5 per cent, followed by Johnson Matthey’s 2.7 per cent hit.
Meanwhile, oil giant BP and Premier Inn owner Whitbread both dipped by 2.6 per cent and 2.3 per cent respectively.
Around the world
Asian stocks extended losses for the week as investors digested comments from the US Federal Reserve projecting rate hikes in 2023.
MSCI’s broadest index of Asia-Pacific shares outside Japan gave up early gains to dip 0.2 per cent, extending declines into a fifth session.
Chinese blue-chips also dropped by 0.4 per cent, but Hong Kong’s Hang Seng index advanced 0.5 per cent.
While the Fed messaging indicated no clear end to supportive policy measures, signals of early rate hikes gestured its concern about inflation as the US economy recovers from Covid-19.
“What is pretty obvious is that the inflation genie is starting to sneak out of the bottle, and that will be a major driver of interest rates in the short to medium term,” said James McGlew, executive director of corporate stockbroking at Argonaut.