UK’s FTSE 100 edged down on Tuesday, after strong US data fanned fears that the Federal Reserve could persist with its aggressive interest rate hikes, while rental equipment provider Ashtead Group jumped on upbeat annual revenue outlook.
The exports-oriented FTSE 100 fell 0.2% at 09:36 GMT, with energy dropping more than 1%. Robust US services data along with a rebound in employment in November could give reason to the Fed to continue raising rates.
“I think what’s happening in the UK markets is more symptomatic of what’s being seen everywhere else,” said Stuart Cole, head macro economist at Equiti Capital.
“After the data we had from the US, the hopes that we were getting close to the pivot point of hikes have been dashed and now every sentiment has taken a hit.”
Market researcher Kantar reported that the UK’s grocery inflation edged lower in November, but was still near record highs.
Cautious traders are staying on the sidelines ahead of a slew of central bank rate decisions including from the Fed and the Bank of England next week.
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Ashtead Group rose 0.6% after the equipment rental firm raised its interim dividend by 20%, while also raising its full-year revenue forecast.
“Growth is coming from the US and the UK, the firm’s typical operating region….perhaps raising the question whether the latter region has a long-term future within the group,” AJ Bell Investment Director Russ Mould said.
Upper Crust owner SSP Group rose 1.8% after it said its average sales rose above pre-pandemic levels as more people returned to work and holiday demand picked up from pandemic lows. The domestically-oriented FTSE 250 fell 0.4%.
Growth in Britain’s construction industry slowed to a crawl in November, while the gauge of future activity sank to its lowest level since the onset of the pandemic, consistent with recession.
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