Blues hit markets as price rises are looming

If shares on Monday looked like they might be bouncing back from last week’s bruising performance, yesterday dented any such hopes.

In the City, the FTSE 100 index pushed at one point hitting as low as 7,020 points.

It ended at 7,034, a 34.37-point drop, or 0.5% lower.

“Having got off to a positive start yesterday, today’s price action looks set to follow the pattern of last week, where after a similar Monday rally, sentiment deteriorated as concerns about profit margins in the face of rising prices saw certain sectors come under further pressure,” said CMC Market analyst Michael Hewson.

In the US, inflation – measured by the Consumer Prices Index (CPI) – showed that prices had increased by 5.3%, lower than had been expected.

Mr Hewson said: “Bond yields have also come under pressure over concerns that the weak US CPI number has been driven by demand deterioration, thus raising concerns about the global recovery story as we head into the fourth quarter.”

The FTSE 100 has been troubled for most of the last month and looks like it could soon fall through the 7,000-point mark for the first time since July.

The index is showing a persistent refusal to bounce back from the Covid-19 pandemic.

In New York, the Dow Jones index passed its pre-pandemic levels in November last year and the S&P did the same in August 2020, over a year ago.

In Europe, the Frankfurt-based Dax topped its prepandemic score in January, while Paris’s Cac 40 surpassed it in March.

All four indexes have continued rising since these points as well.