The FTSE 100 dipped on Tuesday after a slate of poor trading in the US and Asia rippled across the UK markets as a result of recession fears, inflationary concerns and the knock-on effect of Chinese lockdowns on the global economy.
The market was also subdued by recent retail sales figures, which reported falling sales at a level not seen since the peak of the Covid-19 pandemic.
Rising inflation has put a dampener on consumer spending as 9.1% CPI remains on track to spike as high as 11% in October this year, crippling families and slamming the brakes on non-essential retail purchases.
“The FTSE 100 dipped at the open after weak trading in the US and Asia as investors continue to weigh the risks associated with war in Ukraine, stubborn inflationary pressures and Chinese lockdowns,” said AJ Bell investment director Russ Mould.
“This cocktail of worries is preventing the markets from making any tangible progress. Dire retail sales data for June raises the spectre of recession in the UK as cost of living pressures continue to bear down on household finances.”
Commodities Fall
Meanwhile, the lowered price of copper continued to drag down miners after the metal hit a 20-month low on Monday on recession fears, sinking to $3.41 per pound on the New York Comex market.
Anglo American shares slid 1.7% to 2,676.2p, Antofagasta fell 1.4% to 1,052p, Croda dropped 0.3% to 6,781p, Endeavor dipped 0.8% to 1,641.5p, Glencore sank 1.8% to 418.3p, Fresnillo declined 0.3% to 661.7p and Rio Tinto decreased 1.6% to 4,730.5p.
US Inflation Figures
Investors are set to lock their sights across the Atlantic in advance of the US inflation figures release on Wednesday, which is expected to see inflation reach a new 40-year record above its current high of 8.6% as a result of higher food and energy prices.
The NASDAQ was flat in pre-open trading at 11,878.7, with the Dow Jones down 0.7% to 30,922 and the S&P 500 down 0.4% to 3,839.7.