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Miners continue to weigh in London as Fed sparks global sell-off

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Shares closed down across much of the world on Friday (Ian West/PA) (PA Archive)
Shares closed down across much of the world on Friday (Ian West/PA) (PA Archive)

London’s miners had another weak day on Friday but this time did not drag the FTSE 100 below the performance of its global peers during a rough day on international markets.

The FTSE 100 closed down sharply, and was likely saved from an even more devastating drop by a rapidly falling pound.

It ended at 7,521.68 points, a drop of 106.27 points, or 1.4%.

London’s miners once again put downward pressure on the index, they have been weighing on the FTSE since Wednesday.

Several of them have reported weaker-than-expected results this week, and earnings are being hit by increased costs.

But the Friday performance was less severe for the mining giants than other days had been.

Only Anglo American and Glencore were among the worst performers.

But London was at the mercy of global headwinds as its banks, including HSBC and Barclays were caught up in a sell-off caused by comments from the US Federal Reserve.

“It’s been a disappointing end to the week for markets in Europe, after Fed chairman Jay Powell signalled that the Federal Reserve could well go much harder, and a lot quicker when the central bank pulls the trigger on the first of what might be several 50 basis points rate hikes, starting next month,” said CMC Markets analyst Michael Hewson.

“Financials appear to be taking the biggest hit, after a narrowing of yield differentials, prompted concern about the prospect of a policy mistake by central banks, and a possible recession by the end of the year.

“This has manifested itself in weakness in the likes of Schroders, Abrdn and Hargreaves Lansdown, as well as HSBC, and Barclays ahead of the start of UK bank Q1 results, which are due out next week.”

In Europe markets were also deep in the red.

The Dax in Germany dropped 2.5% while Paris’s Cac 40 lost 2%.

On Wall Street shortly before markets closed in Europe the S&P 500 was down 1.2% while the Dow Jones had lost 1.4%.

Despite the performances of the banks and miners, it was B&M that was the worst-hit company on London’s top index on Friday.

Investors were clearly disappointed by the announcement that boss Simon Arora will retire 12 months from now.

The 52-year old has been in the job since 2004, when he bought the company with his brother.

It has since grown to become a FTSE 100 business and has 1,100 stores in the UK and France.

The retailer’s shares dropped 5.9%.

It was likely also hit by the 1.4% drop in retail sales in March, which was revealed by the Office for National Statistics before markets opened.

As one chief executive’s departure was met with sadness from shareholders, investors hardly seemed to endorse the appointment of a new boss to Poundland’s owner.

Shares in PepCo fell by 3.8% after it announced that Trevor Masters, who spent 38 years at Tesco, will become its new chief, a job he has done on an interim basis for the past month.

The biggest risers on the FTSE 100 were Rentokil, up 10.4p to 534.4p, Avast, up 8.8p to 556.8p, Intertek, up 68p to 5,130p, Severn Trent, up 27p to 3,048p, and National Grid, up 10p to 336.6p.

The biggest fallers on the FTSE 100 were B&M, down 33p to 516.6p, Anglo American, down 219p to 3,460.5p, Rolls-Royce, down 5p to 91.57p, Whitbread, down 145p to 2,851p, and Schroders, down 150p to 3,012p.

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