LONDON, May 20 ― London's FTSE 100 fell yesterday, dragged down by heavyweight commodity stocks, while a bigger-than-expected jump in inflation stoked fears the central bank may tighten its monetary policy earlier than expected.
The blue-chip index fell 1.2 per cent, with miners declining 3.9 per cent after metal prices slipped. Oil majors BP and Royal Dutch Shell slid more than 1 per cent each.
The domestically focussed mid-cap FTSE 250 index fell 0.4 per cent.
Official figures showed British consumer price inflation more than doubled in April to 1.5 per cent. The Bank of England hopes the surge in inflation will be temporary as the economy recovers from last year's Covid-19 slump.
A jump in regulated electricity and gas bills, and clothing and footwear prices pushed up the inflation reading. Prices charged by manufacturers also rose by 3.9 per cent, while inputs prices increased by 9.9 per cent, the most since February 2017.
“The UK market is stuck in its range a bit. What will inspire confidence will be broad reopening in western Europe and the US, North America travel corridor,” said Neil Wilson, chief market analyst at Markets.com.
“You do also want to see the Asian markets pick up too. The problem for UK is Asian markets weigh on commodities. So the rise in Covid-19 cases in Asia is worrying.”
Globally, stocks slipped and cryptocurrencies sank as the threat of inflation had investors shy away from assets seen as vulnerable to any removal of monetary stimulus.
Among individual stocks, Ferguson climbed 2.2 per cent to hit a record high after the plumbing and heating parts distributor reported a 65.4 per cent jump in its third-quarter profit.
John Laing Group jumped 11.2 per cent after private-equity firm KKR agreed to buy the British infrastructure investor in a deal valued at about £2 billion (RM11.7 billion).
Publisher Future gained 10.7 per cent after its first-half results beat market expectations. ― Reuters
