FTSE 100 close: London markets dip again as ‘chill winds’ dent sentiment
London markets closed lower again on Wednesday as the gloomy market sentiment of the last few days continued following stronger than expected US data.
The FTSE 100 closed 0.77 per cent marginally lower at 7,412.45, while the FTSE 250 ended down 1.05 per cent at 17,492.90.
A whole host of assets have been trending down over the past two weeks as investors readjust to a world in which interest rates are expected to be higher for longer. Sovereign bonds have been hit the hardest, with yields rising to the highest levels since the financial crisis in many countries.
“Chill winds of worry are swirling about high interest rates settling in and there is set to be little respite from the sell-off,” Susannah Streeter, head of money and markets, Hargreaves Lansdown said.
“Investors have again been reminded by central bank policymakers in the US that the screws may have to be tightened on monetary policy again, and kept there for some time, to stop inflation whipping higher again.”
This was reinforced in the US after demand for workers rose unexpectedly in August, with the JOLTS survey showing 9.6m vacancies on the last business day of August. Economists had expected the number of job opening to fall to 8.8m.
On the FTSE, Tesco climbed 3.9 per cent.
The supermarket giant raised its profit guidance for the year ahead to up to £2.7bn, as the Big Four grocery thanked a slew of price cuts for surging revenues in its interim results.
Its banking arm also performed well with operating profit leaping 25 per cent to £65m.
Whitbread and BAE Systems were the FTSE’s largest fallers, dropping 4.0 per cent and 3.6 per cent respectively.
On the FTSE 250, telecoms firm Spirent closed over 30 per cent loweer after it issued a profit warning thanks to lower than expected Chinese demand.