LONDON, Oct 10 — UK’s blue-chip stock index fell for a fourth consecutive session today, amid a wider risk-off sentiment after Russia bombed cities across Ukraine.
The FTSE 100 index fell 0.8 per cent and the mid-cap FTSE 250 index dropped 1 per cent to touch one-week lows, extending Friday’s losses, also coming under pressure as strong US jobs data doused hopes the Federal Reserve would temper rate hikes.
Massive explosions shook the Ukrainian capital and other cities during rush hour this morning in apparent revenge strikes by Russia after President Vladimir Putin declared an explosion on the bridge to Crimea to be a terrorist attack.
Airlines were among the top decliners, with shares of British Airways-operator IAG, Wizz Air and easyJet down between 2.7 per cent and 4 per cent.
Mining and oil giants also dropped as commodity prices came under pressure.
British power companies Centrica and Drax fell more than 4 per cent each after the Financial Times reported the UK government was pressing ahead with plans to cap revenues of renewable electricity generators.
“Our view is that such a cap would be punitive for the sector and may distort investment incentives,” Jefferies analysts said.
“Further, it may distort market signals ahead of what will be a challenging winter to navigate, given underlying supply shortages across the European region.”
The widespread selling came even as the Bank of England moved to ease concerns about the expiry of its emergency programme at the end of this week to calm turmoil in the government bond market, including a doubling of the maximum size of its planned debt buy-back today.
Investors are awaiting UK’s labour market report as well as August GDP data later this week for clues on how the economy is faring amid worries that soaring inflation and rising interest rates might spark a recession.
Among gainers, student housing provider Unite Group rose 2.6 per cent after providing an upbeat trading update.
DS Smith jumped 10.8 per cent after the cardboard maker forecast overall annual performance ahead of its expectations, helped by strong revenue growth and cost cuts. — Reuters
