FTSE 100 underperformed its European peers as a series of central bank actions and commentary spooked investors and triggered risk aversion. The decrease in PMI readings for September also diminished positive sentiment.
While the U.S. Fed on Wednesday officially announced a moderation in the pace of asset purchases, the Bank of England on Thursday opined that the recent price developments appeared to have strengthened the case for a modest tightening of monetary policy. It however left rates steady at 0.1 percent and Quantitative Easing steady at 895 billion pounds. Earlier in the day, the Norwegian central bank had raised its benchmark interest rate and also hinted at another hike in December.
The FTSE 100 plunged from its day high of 7131.43 as sentiment was dampened following the increasing number of nations moving away from ultra-accommodative monetary policy stance. It is currently trading at 7077.02, down 0.09 percent from the previous close of 7083.37.
The index is currently trading at an advance to decline ratio of 48:53.
Meanwhile, the IHS Markit/CIPS flash PMI releases for September indicated that Manufacturing PMI fell to 56.3 from 60.3 in the prior month; Services PMI decreased to 54.6 from 55.0 in August; and Composite PMI dropped to 54.1 from 54.8 in August.
Rolls Royce Holdings is FTSE 100’s best performer in the day with a gain of 3.13 percent.
Entain plc, which received a fresh takeover offer a day ago from U.S.-based sports betting company Draftkings declined the most in the index by 3.49 percent.
International Consolidated Airlines Group, Hargreaves Lansdown and Polymetal International are also notably lower.
Lloyds Banking group is the most active scrip with a turnover of 66 million. The scrip has gained 1.38 percent.
The GBPUSD pair increased to 1.3709 from 1.3625 at close on Wednesday in the backdrop of the tightening hints given by the BoE in its meeting during the day.
Yields on U.K.’s ten-year bonds firmed up to 0.8780 percent from Wednesday’s close of 0.8000 percent in response to the case for monetary tightening espoused by the Bank of England.
Market Analysis
FTSE100 Overwhelmed By Hints Of Monetary Tightening, PMI Dips
2021-09-23 13:34:03
