LONDON: UK’s FTSE 100 dropped on Thursday, following a selloff in oil and mining majors due to tepid commodity prices on persisting concerns about a global recession.
The blue-chip FTSE 100 ended 1% lower, with oil majors BP and Shell leading losses, while the domestically focused FTSE 250 shed 1.1%.
London-listed shares of global miners including Anglo American, Rio Tinto and Glencore weakened as copper prices tumbled to a 16-month low.
“The fall in metals ... that’s about worries over a slowdown in the global economy,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.
An S&P Global survey showed Britain’s economy is showing signs of stalling as rapid inflation hits new orders and businesses report levels of concern that normally signal a recession.
“Despite the UK resembling a stagflationary economy, the UK FTSE appears to offer a relatively good hedge against stagnant growth and stubborn, broad-based inflation,” said Sean Darby, global equity strategist at Jefferies.
“However, the authorities are boxed in as the UK consumers buckle under pressure from higher mortgage rates, ballooning fuel prices and rising import costs.” Data also showed the British government had to borrow a bigger-than-expected amount of 14 billion pounds ($17.14 billion) amid mounting inflation, debt interest costs.
Shares of 888 slipped 1.0% after the online gambling firm said it expects a drop in its half-year revenue.
Trainline fell 10.1% to the bottom of the FTSE mid-cap after the rail operator’s finance head announced plans to step down.
Naked Wines tumbled 43.6% after the online wine seller said it intends to trade the business at or around break-even in 2022 amid growing uncertainty in the market.