The FTSE 100 and European stocks were lower this Tuesday as investors reassess the global economy’s outlook given expectations for higher interest rates.
The FTSE 100 (^FTSE) dropped 0.37% to 7,906 points at the open, while the CAC 40 (^FCHI) in Paris lost 0.53% to 7,262 points. In Germany, the DAX (^GDAXI) fell 0.55% to 15,290.
Traders are increasingly worried that central banks around the globe will remain hawkish in order to bring down persistent inflation.
Michael Hewson at CMC Markets said: “Later this afternoon we have comment from Bank of England officials [deputy governor, financial stability] Jon Cunliffe, chief economist Huw Pill and external MPC [Monetary Policy Committee] policymaker Catherine Mann, who has become even more hawkish given current trends around increasingly sticky inflation.”
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Shares in Ocado (OCDO.L) have dropped by 7.35% at the start of trading in London, the top faller on the FTSE 100 index. They fell as low as 563p, down from over £13 a year ago.
The online supermarket saw its pre-tax loss balloon to nearly £501m last year, nearly three times as high as in 2021.
Moving in the opposite direction, online electricals retailer AO World (AO.L) was up by 9.5% as it boosted it annual earnings outlook for the third time since November as it said cost-cutting efforts and targeted price rises were paying off.
Meanwhile, Brent crude (BZ=F) rose and was trading at around $83/barrel as demand surged ahead of the release of fresh economic data from China, the world’s largest oil importer and second largest consumer.
In Asia, Tokyo’s Nikkei 225 (^N225) rose 0.1% to 27,445 points, while the Hang Seng (^HSI) in Hong Kong slipped 0.78% to 19,044. The Shanghai Composite (000001.SS) edged higher, rising 0.66% to 3,279 points.
Across the pond, US stocks rose on Monday, fuelling a rebound from Wall Street’s worst week of the year.
The Dow Jones (^DJI) rose 0.22% to close at 32,889 points. The S&P 500 (^GSPC) gained 0.31% to finish at 3,982 points and the tech-heavy NASDAQ (^IXIC) advanced 0.63% to 11,466.
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New orders for manufactured durable goods in January plunged to 4.5%, the biggest drop since April 2020, the Census Bureau reported. The drop was more pronounced than economist estimates of 4.0%.
“The manufacturing sector will remain under pressure in the months ahead, but the details of January’s report of durable goods orders and shipments suggest factory activity started the year on a better note than the headline figure would suggest,” Lydia Boussour, EY Parthenon senior economist, said.
S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the red as trade began in Europe.
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