Author of the article:
Reuters
Shashwat Chauhan and Bansari Mayur Kamdar
Publishing date:
Nov 15, 2022 • 15 hours ago • 2 minute read
Britain’s internationally-focused FTSE 100 slipped on Tuesday as a strong pound weighed on export-oriented companies, and a disappointing outlook from Vodafone and weaker-than-expected employment added to losses.
The blue-chip FTSE 100 closed 0.2% lower, while the FTSE 250 midcap index declined 0.9%.
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Vodafone shed 7.9% to a two-year low after the mobile phone group cut its full-year free cash flow forecast, reflecting a worsening global macroeconomic climate and higher energy costs.
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The pound hit three-month highs against a softer dollar after last month’s U.S. producer inflation rose less than expected, dragging export-oriented companies such as Diageo and British American Tobacco lower.
“Because inflation is rolling over in the United States, it’s leading to a lot of currency strength out of sterling and out of the euro and that’s going to be very important factor in controlling inflation in Europe,” Patrick Armstrong, chief investment officer at Plurimi Wealth, said.
Investors were cautious ahead of Finance Minister Jeremy Hunt’s announcement on Thursday when he is set to raise taxes and cut spending to fix public finances, potentially deepening an expected recession.
“If the government is able to announce measures that will help control inflation without perceiving that they are hurting the economy too much, I think we’re going to see a positive reaction in UK market,” said Daniela Hathorn, senior market analyst at Capital.com.
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Data earlier showed Britain’s unemployment rate unexpectedly rose in the three months through September and vacancies fell for the fifth report in a row as employers worried about the outlook for the economy ahead of the government’s budget plan.
Ocado Group dropped 16.8% to the bottom of the FTSE 100 after sharp gains this month. Shares of the online supermarket and technology group have surged over 60% after it entered South Korea through a partnership deal with Lotte Shopping at the start of this month.
Aston Martin slumped 7.0% after Jefferies cut the luxury car maker’s rating to “underperform.” (Reporting by Shashwat Chauhan, Bansari Mayur Kamdar, Shristi Achar A and Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta and Barbara Lewis)
