The FTSE 100 is down 1.28%, or nearly 90 points, after the bell, knocking back under 7,000 in the process. The move comes “as markets returned to last week’s inflation-fearing panic on Wednesday following a commodity-bloated CPI reading out of the UK,” said Connor Campbell, Financial Analyst at Spreadex.
“Already investors were preparing themselves for the UK’s inflation data for April to double month-on-month, from 0.7% to 1.4%. Instead, it came in just higher than forecast at 1.5%, dragging questions over inflationary pressures and what that means for interest rates kicking and screaming back into the spotlight,” Campbell added.
“There were reasons not to be quite as alarmed. The core reading, which strips out volatile elements, most pertinently commodities, saw a much milder rise, from 1.1% to 1.3%.”
“Still, that was cold comfort for the markets, which reacted exactly as you’d expect given their recent skittishness around inflation data.”
The FTSE 100 wasn’t Europe’s worst performer. Both the DAX and CAC were down 1.1% apiece, leaving the German and French bourses at 15,230 and 6,300 respectively.
“It didn’t help that the European markets were already on the backfoot thanks to the Dow’s decline last night, one that left the index only 60 points above 34,000,” said Campbell.
The Dow is set to drop below that keep level this afternoon, with the futures pointing to a 0.4%, or 120-point, slump when trading starts Stateside.”
FTSE 100 Top Movers
At the time of writing, Ferguson (3.07%), Imperial Brands (0.64%) and DCC (0.18%) are the only three companies on the FTSE 100 to have made gains on Wednesday.
Antofagasta (-3.33%), Anglo American (-3.29%) and Scottish Mortgage Investment Trust (-3.45%) are the biggest fallers on the index.
