Hot US inflation heightens FTSE’s woes amid global sell-off

The FTSE took another fall on Friday 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,” commented 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.

Shares in Just Eat finished 105.8p higher at 1,843p after the takeover speculation.

Elsewhere, kitchenware retailer ProCook plummeted in value after it said more customers tightening their belts in light of the rising cost of living will dampen sales in the year ahead.

Investors should therefore not expect revenues for the latest financial year to have grown from the previous year, which amounted to £69.2 million, it said.

Shares in ProCook were 31.4p lower at 46.6p at the end of the session.

Call centre software company Netcall saw shares jump by 18p to 83p after it announced a multi-year contract with a Global S&P 500 financial services firm that it said will significantly boost revenue and profits.

The price of oil slipped back due to demand concerns in China and fears that high inflation levels could see people pull back on spending.

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

The biggest risers in the FTSE 100 were Aveva, up 56p at 2,434p, Sainsbury’s up 3.9p at 213.3p, Endeavour, up 31p at 1,848p, Fresnillo, up 12.2p at 748.4p, and GSK, up 26.8p at 1,736.6p.

The biggest fallers of the day were Anglo American, down 291.5p at 3,613p, Scottish Mortgage Investment Trust, down 53p at 745.8p, CRH, down 202p at 2,987p, Melrose, sown 9.95p at 154.35p, and Flutter, down 482p at 8,568p.