Connect with us


FTSE 100 slides on economy worries, weak IAG results

FTSE 100 slides on economy worries, weak IAG results 1

By Sruthi Shankar

(Reuters) -UK’s top share index fell on Friday, with British Airways owner leading losses after disappointing results, while a recession warning from the Bank of England weighed on sentiment.

International Consolidated Airlines Group tumbled 6.6% to a near one-month low after it reported a bigger-than-expected quarterly operating loss and scaled back plans to ramp up short-haul capacity at Heathrow airport.

The FTSE 100, which comprises global companies including miners and energy giants, dropped 0.6% to 7,456.4, with most subsectors in the red.

The British central bank warned on Thursday that the country risks a double-whammy of a recession and inflation above 10% as it raised interest rates to their highest since 2009.

The FTSE 100, while on track for weekly losses, has outperformed on a year-to-date basis as a surge in oil and metal prices as well as weakness in sterling has boosted commodity giants and exporters on the index.

“The FTSE 100 is exposed to all the sectors that are causing inflation concerns, and that benefits the UK equity market,” said Caroline Simmons, UK chief investment officer at UBS Global Wealth Management, who expects the index to hit 8,100 by December.

“It hurts the economy because of the consumer squeeze but it benefits the FTSE 100. Now, of course, sterling has weakened and that’s also helpful.”

Sterling dropped below 1.23 against the dollar for the first time in nearly two years on concerns about the economic outlook as well as local elections. [GBP/]

The gloom in markets knocked the domestically oriented midcap FTSE 250 index 1.2% lower, putting it on track for its biggest weekly decline in two months.

Among the bright spots, insurer Beazley Plc gained 6.6% after it reported a surge in quarterly gross written premiums.

Insurers Hiscox, Admiral Group and Direct Line also rose between 2.1% and 3.8%.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila and Vinay Dwivedi)

Editorial & Advertiser disclosure
Our website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.
Global Banking and Finance Review Awards Nominations 2022
2022 Awards now open. Click Here to Nominate


Newsletters with Secrets & Analysis. Subscribe Now