Markets in London closed lower on Friday as a stronger pound and uncertainty over the global economy weighed on investor sentiment.
The FTSE 100 closed 0.5 per cent lower while the FTSE 250 finished the week 0.1 per cent lower.
Caution was the watchword in London today ahead of next week, which will be big for central banks.
As Finalto’s Neil Wilson commented, “markets may be a little cautious with a huge central bank calendar next week with not only the Fed, but also the European Central Bank and Bank of Japan in action. Meanwhile, key US CPI inflation is due up on Tuesday.”
Markets are pricing in rate hikes across the board following hikes in Canada and Australia earlier this week. With central banks still focused on inflation, there is likely to be little respite for global growth either.
Yesterday it was confirmed that the eurozone had slid into recession in the first three months of the year. Consumers have cut spending as a result of surging inflation, the data showed.
Expectations for further hikes has pushed the pound up to around $1.2580 which in turn has weighed on London’s biggest companies, many of which make their profits overseas.
Ocado saw the biggest gains, rising 4.8 per cent. The FTSE 100’s worst performer was Croda after it warned that full year profits were likely to be lower than last year due to lower sales volumes.
The chemicals company pointed to destocking as the cause of the drop in sales. Its shares were down nearly 13 per cent.
“When a company has a track record of delivering the goods, as Croda largely has in recent years, then a premium rating is awarded by the market. Which means when something goes wrong the share price reaction can be particularly negative,” Russ Mould, investment director at AJ Bell said.
Elsewhere Amigo shares jumped over 100 per cent after it reported that it might be able to secure investment from shareholder and financier Michael Fleming.
Although the supreme lender stressed it was unlikely, markets were more than happy to jump on any hint of progress.