FTSE 100 tanks on geopolitical tensions and inflation fears

The FTSE 100 fell sharply on Monday as geopolitical tensions rose following orders by the US and UK to remove diplomatic staff from Ukraine on concerns a Russian invasion was imminent.

The FTSE 100 was 1.01% at 7,418 at the time of writing in early trade on Monday morning. The German Dax was down 1.28% and French CAC gave up 1.5%.

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‘’The threat of conflict breaking out on the doorstep is hanging over European indices, as hopes begin to fade that there will be fresh meaningful moves from diplomats. The tech sector jitters are continuing, unsurprising given the seemingly unstoppable slide of the Nasdaq composite and the march downwards of the S&P 500 on Friday,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

There was also ongoing strife in markets around the impact of interest hikes on technology shares. The Federal Reserve is set to hike a number of times this year and a move away from easy monetary policy has driven a rout in technology shares.

The selling began at the beginning of the year in US tech shares and is now evident in global tech shares that are viewed as being highly valued.

“Amid expectations that inflation appears more entrenched, which could lead to a more aggressive stance to combat soaring in inflation, Scottish Mortgage Investment Trust, which holds a raft of tech stocks, was yet again one of the biggest fallers on the FTSE 100 in early trade,” said Streeter.

UK Housebuilders were also big fallers on Monday as the investors continued to offload the shares in the face of soaring inflation that is eroding household spending and making mortgages less affordable.

Barratt Developments, Persimmon, Berkeley Group and Taylor Wimpey were all down over 4%. Barratt Developments was the FTSE 100’s top faller, down 7%.

Unilever was one the FTSE best performers as activist investor Train Partners takes a stake in the group amid a takeover battle with GlaxoSmithKline.

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