Sep 29 (Reuters) – London stocks fell on broad-based losses on Thursday, with the mid-cap index plunging 3.1%, as concerns over the fallout from the government’s new economic plan continued to rock markets .
The easing of emergency bond-buying measures by the Bank of England on Wednesday proved brief as UK bond yields resumed their rise, as did the pound sterling. Read more
Consumer discretionary stocks led losses in the mid cap index (.FTMC) which fell to May 2020 lows. The index is on track for its worst week since March, down 6, 6%.
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The blue chip index (.FTSE) lost 1.8% as banks and consumer staples weighed. It is set for its third straight weekly drop.
British Prime Minister Liz Truss on Thursday defended her tax cut budget despite criticism from ratings agency Moody’s, the International Monetary Fund and market turmoil. read more read more
Stock markets have been hit globally this year amid fears that an aggressive tightening of monetary policy to curb inflation could tip economies into recession. The FTSE 100 has lost 7% so far in 2022.
“The zero or very low interest rate environment of the past 15 years has masked or concealed some of the fragilities in the financial system, and in fact encouraged a lot of risk taking. obvious.”, said Andrea Cicione, chief strategy officer at TS Lombard.
“This is just one example of leverage in the financial system in places where we weren’t aware there was it… Leverage is still there and it’s very difficult to see it until things start to go wrong.”
Data on Thursday showed British consumer confidence hit a record high this month amid an accelerating cost of living.
Shares of Next (NXT.L) fell 12.2% after it cut its profit and sales forecast, while British American Tobacco (BATS.L) fell 3.6% in ex-dividend trade .
Synthomer (SYNTS.L) fell 35% after lowering its full-year earnings outlook. Read more
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Reporting by Johann M Cherian and Susan Mathew in Bengaluru; edited by Uttaresh.V, Rashmi Aich and Andrew Heavens
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