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Summary
- UK shares collapse as US inflationary pressure mounts
- FTSE 100 shed nearly 3 per cent, as global jitteries rattle London equities
- Negative Wall Street opening added fears to the European markets
UK shares reacted in a largely similar manner as Tokyo stocks did in the overnight deals on Tuesday, 11 May, tracking the cues from subdued Wall Street on Monday. The growing fears of US inflation have had a momentous aftereffect on the share markets globally.
The US Bureau of Labor Statistics is slated to announce the annual inflation rate for April 2021 on Wednesday, 12 May.
Earlier yesterday, Wall Street concluded in the negative region with the tech benchmark Nasdaq Composite leading the losses. Nasdaq plunged 2.55 per cent, sending the shockwaves to the stock markets across the globe with Japan’s Nikkei 225 being the first major victim.
Partially steered by the extension of the state of emergency across many cities in Japan and the Wall Street avalanche, Nikkei 225 crashed a little more than 3 per cent earlier today.
The fears of rising inflation in the US have been apparently instituted by the rising prices of goods produced in China’s factories.
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According to the data released by the National Bureau of Statistics of China, the producer prices in China grew by 6.8 per cent in April 2021 as compared to reading recorded in the same month a year earlier. The factory gate prices in China have grown at the steepest pace since October 2017, realising an uptick for the fourth consecutive month in April.
The worldwide equity rout engulfed the European markets, while the negative opening of Wall Street following Monday’s dejected trade added more to the fears.
All the leading barometers of Wall Street including the Dow Industrials, Nasdaq Composite and the broader indicator S&P 500 slipped more than 1.5 per cent in the trade today.
London equities failed to stay immune to the global jitteries. The benchmark FTSE 100 started the week on a negative footing on Monday. The index fell as much as 2.97 per cent to an intraday bottom of 6,912.36, from the previous close of 7,123.68.
FTSE 100 (11 May)
(Source: Refinitiv, Thomson Reuters)
A market-wide collapse in equities wobbled the other market capitalisation based indices on the London Stock Exchange (LSE) in an analogous routine. The losses of FTSE 250, however, stayed below as compared to FTSE 100. The mid-cap heavy FTSE 250 made an intraday low of 22,126.61, down 2.51 per cent from the previous close of 22,697.19. FTSE 350 and FTSE All-Share traded 2.72 and 2.62 per cent lower, respectively.
