FTSE 100 slips as rate-hike fears spike, NatWest tumbles
UK’s FTSE 100 fell on Friday, with banking stocks leading losses after lender NatWest forecast dour earnings, and as investors gauged the prospects of further monetary policy tightening by the U.S. Federal Reserve to tame inflation.
The blue-chip FTSE 100 (.FTSE) lost 0.4%, but is set to post a weekly gain of 1.3%.
The domestically-focussed FTSE 250 midcap index (.FTMC) fell 0.5%, although it was on track to eke out a weekly gain of 0.3%.
Shares of NatWest (NWG.L) tumbled 7.6% to reach the bottom of the index, after the British bank warned that rising interest rates may not deliver the long-lasting earnings bonanza investors hope for.
The broader banking sector (.FTNMX301010) slipped 0.8%.
UK markets were also taking cues from a gloomy global sentiment, triggered by U.S. data on Thursday that showed higher inflation and a drop in weekly jobless claims. The lacklustre data aided bets the U.S. Fed will stick to its aggressive tightening path.
“We’re back to that kind of market behaviour where good news is bad news,” said Andrea Cicione, head of strategy at TS Lombard.
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