FTSE 100 hits two-month low on virus, economic recovery fears

A bigger-than-expected jump in inflation in June has also weighed on UK stock indexes in the past month, putting the export-heavy FTSE 100 on course for its fourth straight weekly decline. Asking prices for British homes rose by 0.7% between mid-June and early July compared with a month earlier, the biggest rise for the time of year since 2007, property website Rightmove said.


Reuters | Updated: 19-07-2021 13:54 IST | Created: 19-07-2021 13:51 IST
FTSE 100 hits two-month low on virus, economic recovery fears
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The FTSE 100 fell to a two-month low on Monday on concerns that a spike in coronavirus infections could derail a nascent economic recovery, while a recent surge in inflation raised fears of a quicker tapering in global monetary stimulus.

The blue-chip FTSE 100 and the mid-cap FTSE 250 tumbled 1.2% and 1.5%, respectively, as Prime Minister Boris Johnson lifted most restrictions in England in what some have dubbed "Freedom Day" despite fresh cases. Energy, mining, and financial stocks were among the biggest decliners, while no single FTSE 100 stock posted gains in early trading.

"There was a great deal of optimism over the summer reopening, but as we look at how Delta variant infections are rising, some of that optimism is dissipating, prompting the question as to where we go next for Q3 earnings expectations," said Michael Hewson, market analyst at CMC Markets UK. A bigger-than-expected jump in inflation in June has also weighed on UK stock indexes in the past month, putting the export-heavy FTSE 100 on course for its fourth straight weekly decline.

Asking prices for British homes rose by 0.7% between mid-June and early July compared with a month earlier, the biggest rise for the time of year since 2007, property website Rightmove said. Still, shares of homebuilders fell 1.5%, in line with the broader market.

Travel-related stocks sank for the fifth time in six days as the surge in infections raised the specter of new travel curbs. British Airways owner IAG and InterContinental Hotels fell more than 4% to the bottom of the FTSE 100.

Ocado slipped 3% after the British online supermarket and technology group's largest automated warehouse suffered a fire, halting the fulfillment of customer orders from the site. On the other hand, video game company Sumo Group surged 42.2% after it said Chinese tech giant Tencent Holdings would buy the British firm in a deal valuing it at 919 million pounds ($1.27 billion).

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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