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The opening of US markets weighed on London’s shares on Wednesday as they ended the week down ahead of the bank holiday weekend.
The FTSE 100 broke a five-day winning streak after losing ground heavily during the afternoon.
The drop wiped out all the gains that the index has slowly built up since last Thursday.
By the end of the day it closed at 7,532.95, a drop of 74.71 points, or 1%.
It followed a similar sell-off stateside, with both the S&P 500 and the Dow Jones trading down around 1% as European markets were shutting for the day.
In Germany things looked better, with the Dax down just 0.3%, while France’s Cac 40 dropped 0.8%.
“It looks like it’ll be 7,600 and no further for the FTSE 100 ahead of the UK’s Jubilee holiday,” said IG chief market analyst Chris Beauchamp.
“UK markets have been in no mood for celebrations today, running out of steam after last week’s rebound and suggesting that we are in for more losses as June gets under way.
“It looks like investors remain much more cautious about chasing gains in equities, and if anything remain firmly averse to recommitting themselves to stocks as the outlook for growth and inflation continues to worsen.
“Wall Street isn’t in a happy mood either. President Biden’s comments on giving Powell room to combat inflation seem to be overwhelming the hope that the Fed might pause its hiking moves towards the end of the summer.”
On currency markets one pound could buy 1.2468 dollars, down 0.23%, or 1.1722 euros, a drop of 0.07%
In company news, Dr Martens was walking on air as its shares catapulted to the top of the FTSE 250.
The business saw its market value soar by nearly a fifth after it raised sales guidance as revenue rose 18% to more than £908 million in the year to the end of March.
Pre-tax profit rose from less than £70 million to more than £214 million in the year.
Shares closed up 19.6%.
Elsewhere, BT’s shares seemed to be unaffected – up 0.7% – by the news that one of its deals is being probed by competition regulators.
The company’s deal to form a joint venture with Eurosport owner Warner Bros Discovery has drawn scrutiny from the Competition and Markets Authority.
The biggest risers on the FTSE 100 were BAE Systems, up 22.2p to 778.2p, Rolls-Royce, up 2.04p to 88.73p, Bunzl, up 44p to 2,811p, Antofagasta, up 17.5p to 1,495p, and British American Tobacco, up 34.5p to 3,536.5p.
The biggest fallers on the FTSE 100 were Flutter Entertainment, down 478.0p to 9,282p, National Grid, down 50.0p to 1,121p, St James’s Place, down 46.5p to 1,247.5p, London Stock Exchange, down 258.0p to 7,144p, and Whitbread, down 94.0p to 2,629p.