Investing
London stocks slide as downbeat GDP, hot U.S. inflation data weigh
Global Banking & Finance Review®
Company
(Corrects typo in paragraph 1)
(Reuters) – UK shares dropped on Thursday as risk sentiment took a beating after data showed British economy shrank in March, highlighting the cost-of-living crisis while persistently hot U.S. inflation data exacerbated investor fears of aggressive rate hikes.
The blue-chip FTSE 100 was down 2%, as of 0705 GMT, with commodity stocks among the worst performers.
Oil majors BP and Shell fell 4.4% and 2.8%, respectively, while miners declined 4.3%, tracking the drop in commodity prices on demand concerns and recession fears.
The domestically focussed mid-cap index fell 1.6%.
Britain’s economy shrank by 0.1% in March, but expanded by 0.8% for the first quarter of 2022 as a whole, in what is likely to have been a high point for 2022 as the cost-of-living crisis increasingly bites, according to data on Thursday.
Rolls-Royce rose 2.5% as the luxury carmaker traded in line with expectations in the first four months of the year, helped by a gradual return to flying and increased government investment in defence.
(Corrects typo in paragraph 1)
(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Sherry Jacob-Phillips)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI).
The FTSE 100 is a stock market index that represents the 100 largest companies listed on the London Stock Exchange, reflecting the performance of the UK stock market.
Commodity stocks are shares of companies that produce or trade raw materials such as oil, metals, and agricultural products. Their performance is often linked to commodity price fluctuations.
A cost-of-living crisis occurs when the prices of essential goods and services rise significantly, making it difficult for individuals and families to afford basic necessities.
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