Inflation Shocker Drags FTSE 100
(RTTNews) - FTSE 100 of the London Stock Exchange dropped as a negative surprise on the inflation front shocked markets. Fears that the reading would limit the headroom that the Bank of England has on easing the rate hikes dampened sentiment. The BoE's review is due on Thursday.
Inflation for the month of February, which was expected to fall to 9.9 percent, from 10.1 percent in January, actually increased to 10.4 percent. Core inflation also increased to 6.2 percent versus previous reading of 5.8 percent and expectations of 5.7 percent.
FTSE 100 oscillated between 7,536.22 and 7,505.48 versus the previous day's closing level of 7,536.22.
The benchmark index of the London Stock Exchange is currently trading at 7,531.77, down 0.06 percent on an overnight basis.
In the 100-scrip index, only 30 are trading in the overnight green zone. Relief at the fading banking crisis lifted bank shares. HSBC Holdings topped 3 percent. Other prominent banking names like Barclays, Standard Chartered and Natwest Group also rallied more than 2 percent. Lloyds Banking Group gained 1.7 percent.
British Land Company dropped close to 4 percent. Segro too shed more than 4 percent.
Expectations of further rate hikes shifted sentiment in favour of the sterling, lifting the GBP/USD pair to 1.2285, up 0.58 percent on an overnight basis. The pair ranged between 1.2208 and 1.2298.
Yields on U.K.'s ten-year bonds also reflected the rate hike expectations, rising 3.2 percent to 3.4760% from the previous close of 3.369%.
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