London's FTSE 100 falls 1% as miners and tech weigh; BoE holds rates
FTSE 100 Performance and Market Drivers
By Utkarsh Hathi and Tharuniyaa Lakshmi
June 18 (Reuters) - Britain's FTSE 100 fell on Thursday, pressured by miner and technology shares, while the Bank of England left interest rates unchanged, as widely expected.
The blue-chip FTSE 100 index closed 1% lower at 10,399.70 points, while the midcap FTSE 250 eased 0.1%.
Bank of England and Global Central Bank Actions
The BoE held rates at 3.75%, with only two of the nine-member committee voting in favour of a rate hike amid persistent inflation concerns.
The U.S. Federal Reserve also held rates on Wednesday, though nine Fed policymakers forecast a rate hike this year.
Expert Commentary on Monetary Policy
"The conditions don’t seem in place for sustained inflationary pressure. So we think the BoE will be able to avoid the kind of monetary tightening that the European Central Bank has already started to deliver and that the Fed hinted at last night," said Luke Bartholomew, deputy chief economist, at Aberdeen.
Sector and Stock Movers
Miners and Technology Shares
• Precious metal miners declined the most, as gold and silver prices eased. Fresnillo and Hochschild Mining fell 5.8% and 7.2%, respectively.
• London Stock Exchange Group was the biggest individual faller, down 7% after Rothschild Redburn downgraded the stock to "neutral". Technology shares more broadly lost 3.3%.
Other Key Movers
• Interest rate-sensitive homebuilders were down 1.1%, with Persimmon falling 6.1%.
• The world's largest exhibition group Informa was the biggest gainer on the FTSE 100, rising 2.5% after forecasting stronger growth in 2027.
• Oil giants BP and Shell fell 1.6% each, as oil prices touched their lowest since the start of the Iran war. [O/R]
• Intertek gained 1.6% after the testing and certification firm agreed to a takeover by Swedish private equity firm EQT.
Political and Market Sentiment Factors
Political Developments
• The northern English constituency of Makerfield votes on Thursday in a local election that could trigger a leadership challenge to Prime Minister Keir Starmer, who has vowed to remain in office.
Investor Sentiment and Bond Yields
• "Political uncertainty is impacting investor sentiment and has also manifested itself in higher bond yields than the economic data would suggest, particularly at longer durations," said Clive Beagles, senior fund manager at J O Hambro Capital Management. "The impact is felt more strongly in the FTSE 250 than the FTSE 100 because it has greater domestic exposure."
Reporting Credits
(Reporting by Utkarsh Hathi and Tharuniyaa Lakshmi in Bengaluru, Additional reporting by Sophie Kiderlin in London; Editing by Tasim Zahid, Kirsten Donovan)