Wednesday 24 March 2021 8:46 am

FTSE 100 slips as fears of third Covid wave spark recovery concerns

London’s FTSE 100 dipped by 0.2 per cent on Wednesday as a jump in Covid cases across Europe sparked concerns about its near-term economic impact.

The blue-chip index was edged down by bank stocks including HSBC, Barclays and Lloyds falling between one per cent and 1.5 per cent.

British consumer price inflation fell to 0.4 per cent in February from 0.7 per cent the previous month, as rising fuel costs failed to offset discount clothing.

The drop comes as GBP weakened as far as $1.37050 on Wednesday, while the US dollar approached a four-month high.

Meanwhile, the mid-cap FTSE 250 rose by 0.3 per cent, as it recovered from early morning declines in industrials stocks.

Read more: UK CPI: Inflation rate falls back in February as discounted clothes offset rising petrol prices

Market movers

The morning’s biggest winner was airline IAG, who rose 4.8 per cent, followed by Sage, up by more than 2.3 per cent.

BP and Barclays also recovered from early morning dips, rising 1.6 per cent and 1.3 per cent respectively.

Just Eat was the morning’s biggest faller, dropping by more than 2.5 per cent, closely followed by Rightmove’s 2.1 per cent hit.

Meanwhile, AstraZeneca and BHP Group dipped 1.7 per cent and 1.5 per cent respectively.

Read more: UK housebuilder Bellway ups selling price expectations and reinstates dividend

Around the world

Elsewhere, Asian markets extended losses on Wednesday with renewed virus and vaccine fears returning to spook investors.

The dollar neared four-month highs as coronavirus lockdowns in Europe and potential US tax hikes hit risk appetite.

Asia-Pacific shares outside of Japan fell 1.3 per cent, while Chinese shares were in the red for a second day.

On Wall Street overnight, the Dow Jones Industrial Average fell 0.94 per cent and the Nasdaq Composite dropped 1.12 per cent.

“We continue to stress that the economic outlook remains tied to the path of the virus,” said Kim Mundy, senior economist at Commonwealth Bank.

Read more: Wall Street rallies on tech rebound as FTSE closes in the green

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