Address

Precise Investors

Friday, August 12, 2022
Stocks & Shares

FTSE 100 ends almost flat as BoE hikes interest rates

interest rates

The UK blue-chip index was up 2.38 points, or 0.1% at 7,448.06, well below the session peak of 7,491.74 but above the day’s low of 7,417.49

The FTSE 100 index ended slightly firmer on Thursday after a see-saw session as the Bank of England, as expected, hiked interest rates by 50 basis points. It was the biggest interest rate hike from the BoE in 27 years.

At the close, the UK blue-chip index was up 2.38 points, or 0.1% at 7,448.06, well below the session peak of 7,491.74 but above the day’s low of 7,417.49.

On Wall Street, around London’s close, the Dow Jones Industrial Average was down 95 points, or 0.3% at 32,716, while the broader S&P 500 index and the tech-laden Nasdaq Composite both lost 0.3%.

Chris Beauchamp, chief market analyst at IG commented: It looks like this relief rally is beginning to run out of good news. After a solid earnings season so far, stocks are facing a period where the sheer number and also the profile of those stocks reporting are beginning to decline.

Fundamentally, the dip buying over the past month has been valuation-based, and with earnings estimates for coming quarters still heading lower stocks are rapidly running out of room for more gains. Recession concerns seem to be returning too, a point underlined by the Bank of England’s comments in its meeting today, he said.

He added: UK stocks have enjoyed a decent bounce off the lows, but Andrew Bailey and co are clearly worried about the economy, and now expect a recession and two years of negative income growth. The pound’s slump in the wake of today’s MPC decision underlines the caution investors have regarding the UK economy, and suggests that the pound’s miserable performance thus far in 2022 is unlikely to change for the time being.

Important:

The articles are for information purposes only and Precise Investors shall not be held responsible for any errors, omissions or inaccuracies within it. Any rules or regulations mentioned within the website are those relevant at the time of publication and may not be the most up-to-date.

Precise Investors does not endorse any of the products or services that appear on it or are linked to it and are not liable for any action that you may take as a result of the content of this website, or losses or damage you may incur doing so.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Please remember that investments of any type may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

Leave a Reply