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FTSE 100 slips as COVID-19 cases jump

·2-min read
A worker shelters from the rain as he passes the London Stock Exchange in London

By Shashank Nayar

(Reuters) -London's FTSE 100 slipped on Wednesday over concerns that a recent jump in coronavirus infections could hinder the pace of economic growth, taking the shine off what is likely to be a fifth straight monthly gain for the blue-chip index.

The FTSE 100 fell 0.6% with heavyweight financials leading declines, down 1.1%. A fifth month of consecutive gains would be the index's best winning streak since 2016.

The index has gained 7.7% so far this year and is nearly 10% away from its record high. However, it has significantly underperformed its European peers with the STOXX 600 hovering near its all-time high, as inflation concerns and rising COVID-19 infections hinder the recovery process.

"The risks investors are willing to take are quite calculated right now (by) trying to modify bets based on how high inflation is going to rise against how temporary the rise will be," said Bert Colijn, a senior economist at ING.

Retailers slipped 0.3% after an industry group said growing costs linked to COVID-19 and Brexit might add to the rise in broader inflation soon.

"The near-term effects of inflation seem to be controlled and factored in for the moment but there remains uncertainity about the spread of the new coronavirus variant and concerns on how it will affect the recovery process," said Colijn.

The domestically focussed mid-cap index slipped 0.1%.

Among stocks, Dixons Carphone dropped 1.4% even after the electricals retailer reported a 34% rise in annual profit.

Opioid addiction treatment maker Indivior Plc jumped 9.4% to the top of the FTSE 250 index after it said its 2021 revenue and profit would be significantly above its previous outlook.

Automakers fell 1.7% after car dealership Pendragon warned that vehicle orders were getting delayed due to a global chip shortage and flagged further supply constraints in the second half.

(Reporting by Shashank Nayar in Bengaluru; Editing by Subhranshu Sahu)

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