FTSE 100 slips below 7,200; Wall Street hovers in red

US Markets: All the three major stock averages of the United States started in the negative region on Wednesday, 15 December, with the tech heavy market index Nasdaq Composite leading the losses as Omicron fears escalated with the healthcare authorities worrying about the dominating nature of the variant.

Market participants have extensively turned cautious ahead of the policy statement by the Federal Open Market Committee (FOMC) of the US Federal Reserve. Investors are keen on absorbing the policy outcome as the US Fed officials are highly likely to indicate a timeline for tapering the bond purchases and beginning the interest rate hike in order to contain the rising rate of inflation in the United States.

With the US inflation rate hovering at a 39-year high, the hurdles of higher input prices have furthered the pain for enterprises that are already grappling with the inadequacy of raw materials and higher procurement costs.

The sliding retail trade in the United States has also increased the jittery for investors. In November of 2021, the retail trade grew with a meagre 0.3%, well below the street expectations of 0.8%. The anticipation of higher consumer spending has once again faded away with the consumers battling the rising prices.

American equities witnessing choppy trading activity for the third day in a row erased the so-called festive season optimism as investors are progressing ahead with high caution with the cases linked to the Omicron variant remaining on a rising run.

The Dow Jones Industrial Average dropped 102.95 points, or 0.29% to 35,441.23, the technology indicator Nasdaq Composite fell 85 points, or 0.56% to 15,152.64 and the broader share barometer S&P 500 shed 10.74 points, or 0.23% to 4,623.35.

US Market News: Shares of Cisco Systems and Merck & Co emerged as the biggest gainers amid the 30 heavyweight components of Dow Industrials with both the stocks rising more than 1%, trying to offset the negative points. The market index was partly supported by the low-to-moderate upsurge in the shares of Walmart, UnitedHealth Group and Microsoft.

On the other hand, the stocks of Boeing, American Express, Chevron, Dow, Caterpillar, Goldman Sachs, JPMorgan Chase and Walgreens Boots Alliance tumbled 1-3%, effectively counterbalancing all the positive points supplied by the leading gainers.

The investors’ dejection is likely to continue, while major institutional players are tip-toeing the markets following the industry-wide challenges and fears of the Omicron variant.

UK Markets: London equities dropped further in the terminal deals on Wednesday as investors across the world waited for the policy statement by the US Federal Reserve, with the Bank of England and the European Central Bank linked up to release their respective policy decisions on Thursday.

The domestic benchmark FTSE 100 once again tripped below the psychological level of 7,200. This has been the sixth straight session when the market index is set to terminate in the negative territory. After staging a sharp comeback in the second of present month, the index has been on a losing trend with the six-day losses rising over 2%.

The domestic sentiments have been further battered by the consumer price based inflation in the United Kingdom soaring to 5.1% in November of 2021, the highest rate of inflation since September 2011. The recent jump in the rate of inflation has been due to the mounting energy prices, lower base in the same period of last year and elongated disruptions on the back of faltering supply chain systems.

Shares of DCC surged the most among the 101 constituents of the benchmark index with the stock rising more than 9%, whereas the stock of Rentokil extended losses with the shares diving over 5%, being the biggest loser. As far as the top heavyweights are concerned, shares of Unilever, BP, Royal Dutch Shell, Rio Tinto, Glencore, BHP Group, Anglo American, Prudential and Lloyds Banking Group cracked 1-3%, dragging the index into the negative region.

FTSE 100 lost 45.62 points, or 0.63% to 7,173.02, while the mid-cap barometer FTSE 250 declined 111.63 points, or 0.50% to 22,439.06.

FTSE 100 (15 December)

Source: EODHD/Others

Market Snapshot

Top 3 volume leaders:, Vodafone Group, Lloyds Banking Group, and Glencore

Top 3 sectoral indices: Electricity Generation and Distribution, Industrial Engineering, and Electronic & Electrical Equipment

Bottom 3 sectoral indices: Telecommunications, Retailers, and Industrial Metals

Crude oil prices: Brent crude down 0.68% at $73.20/barrel; US WTI crude down 0.83% at $70.14/barrel

Gold prices: An ounce of gold traded at $1,767.40, down 0.28%

Exchange rate: GBP vs USD - 1.3222, down 0.12% | GBP vs EUR - 1.1740, down 0.14%

Bond yields: US 10-Year Treasury yield - 1.439% | UK 10-Year Government Bond yield - 0.7280%

Markets @ 16:23 GMT

© 2021 Kalkine Media®