Markets ‘skittish’ and FTSE falls amid worsening US inflation data

The FTSE took another fall yesterday after worsening US inflation data led to a pessimistic end to the week for traders.

Sentiment had started on a weak footing amid continued concerns in the Asian markets over the return of coronavirus restrictions in some parts of Shanghai.

But hopes of a late rally vanished after a US Consumer Price Index (CPI) inflation reading of 8.6% for last month.

“Stocks, and investors, are very jumpy about inflation once again,” said Chris Beauchamp, chief market analyst at IG.

“This was the case before today’s US CPI figure, thanks in no small part to the European Central Bank on Thursday, but this afternoon has really set the cat amongst the pigeons.

“This puts markets in skittish mode ahead of next week’s Fed meeting, as inflation rises again, sparking new debate about whether Powell and co will need to step up their tightening efforts over the summer.”

London’s top flight ended the day down 158.69 points, or 2.12%, at 7,317.52.

In Europe, the situation was similar as commodity firms dropped amid concerns that further restrictions in China could impact demand.

The German Dax decreased by 3.01% by the end of the session, while the French Cac fell 2.73%.

Unsurprisingly, Wall Street’s main markets also opened significantly lower while the US bond markets saw a jump in activity.

Meanwhile, sterling was left stranded as the US dollar rocketed due to the hot inflation reading.

The pound was down 0.15% against the dollar at 1.232 and dropped 0.03% against the euro to 1.171.

In company news, Just Eat Takeaway.com had a strong session after Bloomberg reported that US private equity firm Apollo is among suitors interested in snapping up its GrubHub business.

In April, Just Eat said it was eying a sale of GrubHub, the US arm it only bought in 2020, after pressure from activist investor Cat Rock.

Brent crude decreased by 2.35% to 120.18 US dollars per barrel when the London markets closed.

“Stocks and investors are jumpy about inflation again