Yahoo Finance FTSE underperforms as World Bank warns of ‘human catastrophe’
The FTSE 100 (^FTSE) continued to lag behind its European counterparts on Thursday, held back by a slightly stronger pound against the dollar, and underperformance in the basic resource sector.
London’s benchmark index was flat upon closing, with mining shares among the top fallers again after the bourse spent the day muted. The French CAC (^FCHI) rose 1.5% on the day and the DAX (^GDAXI) was 1% higher.
The mood came as David Malpass, president of the World Bank, warned that the world is facing a “human catastrophe” from soaring food prices following Russia’s invasion of Ukraine.
In an interview with the BBC, he said record rises in food prices would push hundreds of millions of people into poverty.
“It’s a human catastrophe, meaning nutrition goes down. But then it also becomes a political challenge for governments who can’t do anything about it, they didn’t cause it and they see the prices going up," he said.
"It hits the poorest the hardest. That was true also of COVID. It’s affecting food of all different kinds: oils, grains, and then it gets into other crops, corn crops, because they go up when wheat goes up."
The World Bank estimates there could be a 37% increase in food prices.
Read more: What Ukraine invasion means for consumer prices in the UK
Traders will also be looking ahead to comments from the central bank trio, consisting of Fed chair Jay Powell, ECB president Christine Lagarde, and Bank of England (BoE) governor Andrew Bailey, who are all due to speak in Washington DC.
Across the pond, the S&P 500 (^GSPC) rose 0.4% and the tech-heavy Nasdaq (^IXIC) climbed 0.3% after the bell. The Dow Jones (^DJI) edged 0.4% higher at the time of the European close.
On Wednesday, the tech-heavy Nasdaq fell 1.2% on the day, dragged down by Netflix (NFLX). The streaming giant saw its shares crash 35% after it revealed it expects to lose 2 million subscribers in the coming months. The Dow, on the other hand finished the day strongly higher.
Meanwhile, Tesla (TSLA) reported jump in sales and profits on Wednesday night, with revenues climbing from $10.4bn (£8bn) to $18.8bn in the first quarter.
It delivered a record 310,048 cars in the first three months of 2022, up from 184,800 in 2021. Shares were more than 10% higher as US markets opened.
"Tesla’s results last night should offset a reasonable chunk of tech jitters," Sophie Lund-Yates: Lead Equity Analyst at Hargreaves Lansdown, said. "Elon Musk’s famous EV company managed to post operating profits which were up over 500%, as its factories benefitted from the economies of scale. More than that, a measured restarting of production has started in China, following total shutdowns in the country’s lockdown."
Read more: Elon Musk's $43bn Twitter bid: What is a poison pill defence?
Elsewhere, mainland China and Hong Kong stocks fell overnight amid worries about the Chinese economy. There was disappointment from traders in the Asian region as China left interest rates unchanged, despite pledges to support an economy which has come under renewed pressure after a surge of new COVID cases and more lockdowns in key industrial areas.
The Hang Seng (^HSI) fell 1.5% in Hong Kong on Thursday, while the Shanghai Composite (000001.SS) dipped 2.3%, pulling MSCI's broadest index of Asia-Pacific shares outside Japan lower.
However, an overnight tumble in longer dated US treasury yields lent support to other benchmark indexes, with the Nikkei (^N225) climbing 1.2% in Tokyo.
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