UK’s top share index slipped from two-week highs on Wednesday, mirroring sharp losses in Asian equities and Wall Street overnight, as weak U.S. consumer confidence data revived fears about a recession in the world’s largest economy.
Recouping some initial losses, the blue-chip FTSE 100 index was down 0.5% by 0848 GMT, while the domestically focussed mid-cap FTSE 250 fell 1.2%.
Both indexes were set to snap a three-day winning streak.
“We are seeing signs that consumer confidence is seeping away and worries that global growth will go down the drain as the FTSE 100 is following in the footsteps of Wall Street and indices in Asia,” Hargreaves Lansdown analyst Susanna Streeter said.
The UK economy struggles from the risks of recession and soaring inflation, which is nearing a double-digit territory, while the Bank of England is expected to raise interest rates again in August.
Those fears have weighed on FTSE 100 recently, with the blue-chip index tracking its worst quarterly performance since September 2020.
FTSE 100 hits over 2-week high
The index has dropped 1.3% so far this year, but outperformed its global peers due to a large presence of resource-focused companies, which have benefited from a surge in energy and commodity prices.
Industrial metal and mining stocks were among the worst hit, down 1.2% on Wednesday, as copper prices slipped after a recent rally on hopes of a resurgence in demand from top consumer China.
Miner Anglo American and spirits maker Diageo dropped 2.7% and 3.3%, respectively, after Deutsche Bank cut its ratings for both companies.
However, oil majors such as Shell and BP edged higher even as crude prices remained under pressure.
United Utilities and National Grid rose 0.8% and 0.9%, respectively, after British energy regulator Ofgem proposed a 20.9 billion pounds ($25.48 billion) package to boost grid capacity.
Shares of Lookers jumped 4% after the automotive aftersales company hiked its full-year outlook on the back of vehicle shortages.
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