LONDON: Britain’s main stock indexes snapped a string of weekly gains on Friday, marking a grim start to 2024, as investors scaled back bets of aggressive monetary policy easing following better-than-expected economic data.
The exporter-heavy FTSE 100 fell 0.4%, under pressure from a stronger pound that tends to hurt shares of dollar earners. The index also fell 0.6% over the week, its first drop in six weeks. After a strong 2023, global stock markets have sold off in the new year as investors re-priced expectations on how many times the US Federal Reserve and other major central banks will cut rates this year.
While Wall Street stocks recovered from an early sell-off, which was triggered by a stronger-than-expected jobs data, European markets remained under pressure.
“After a strong end to 2023 on expectations of early central bank rate cuts, markets have started 2024 undergoing the equivalent of a bit of a cold shower,” noted Michael Hewson, chief market analyst at CMC Markets.
Spirits maker Diageo dropped 1.5% after China opened an anti-dumping investigation into brandy imported from the European Union. China accounts for 3% of sales for Diageo.
UK-listed shares of Endeavour Mining slid 6.9% as the gold miner said it had removed CEO Sebastien de Montessus with immediate effect. Britain’s mid-cap FTSE 250 index fell 0.8% for a weekly decline of 2.4%.
A series of economic data this week showed some evidence that Britain’s economy was more resilient than feared in December, prompting traders to cut back expectations of rate cuts from the Bank of England this year.
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