UK stock markets set to suffer sharp losses this week as Fed, tech concerns impact the market
London's major stock indexes fell on Friday and headed for weekly losses as fears over tech valuations, the Federal Reserve's hawkish position, and signs of possible progress towards peace in Ukraine rattled global markets. Defence shares also dropped amid signs that could lead to a breakthrough.
The blue-chip FTSE 100 fell 0.4% at 1222 GMT, erasing the short recovery of Thursday, while the midcap FTSE 250 index declined 0.6% and was on track to extend its loss streak to an eight consecutive session.
The rally that began on Thursday after Nvidia released its upbeat chip forecast was short-lived. Worries about a possible AI bubble returned and the mixed U.S. job report made it unclear whether Fed rate cuts were likely.
The UK's two stock indexes are poised to record even greater weekly losses than in April when the markets were shaken by President Donald Trump’s tariff announcements.
Aerospace and Defence stocks fell by 3.2%, their lowest level in three months. Investors were watching developments surrounding a new U.S. plan to end the Russian conflict in Ukraine.
Babcock, a defence and engineering contractor, fell 0.7% despite reporting a 19% increase in its first-half profits and predicting further growth for this year.
Banking stocks fell by 0.7% with heavyweights HSBC and Barclays falling about 1%.
Gold prices fell more than 1%. Industrial metal miners dropped 1.7% as copper prices hit their lowest level for over two weeks.
The domestic economic data has also contributed to the doom. Retail sales fell in October along with a weakening of household sentiment. Meanwhile, business growth stagnated as the PMI for November dropped.
The companies are now waiting for the budget announcement next week, when Finance Minister Rachel Reeves will likely implement additional tax hikes.
ASOS, a fast-fashion retailer, fell 8.7% among individual movers after it forecast a lower annual profit than analysts expected. (Reporting and editing by Shreya Biwas; Utkarsh T. Hathi)
(source: Reuters)
