FTSE 100 nears one-month low due to risk-averse sentiments in global markets

FTSE 100: London's FTSE 100 index neared a one-month low on Tuesday, influenced by risk-averse sentiments in global markets. Despite positive UK wage data, hawkish comments from central bankers weighed on the index, resulting in a 0.4 per cent drop to its lowest level since mid-December. The FTSE 250 index, focused on domestic markets, remained flat.

Global equities, including Asian and broader European markets, experienced selling pressure following warnings from European Central Bank officials on Monday, asserting it was premature to discuss interest rate cuts. Mixed remarks on Tuesday contributed to the overall cautious market sentiment.

The data revealing the slowest growth in British wages in almost a year provided some relief, suggesting a gradual easing of inflationary pressures in the labour market, a concern for the Bank of England. However, experts, such as Stuart Cole, Chief Macro Economist at Equiti Capital, anticipate the Bank to maintain a "higher-for-longer" stance until convinced that inflation is returning to target and its underlying causes are contained.

Adjusted expectations

The start of the year saw UK equities on a downward trend as global investors adjusted their expectations for aggressive monetary policy easing, particularly in light of better-than-expected economic data from the United States.

In specific stock movements, Rightmove Plc, the UK's largest property portal, experienced a 4.9 per cent decline, earning the title of the FTSE 100's largest loser, following a downgrade from JP Morgan to "underweight." Conversely, Ocado Group saw a 5.6 per cent increase after online supermarket Ocado Retail assured it would achieve its full-year 2022/23 positive earnings forecast.

Experian gained 2.4 per cent after reporting a 9 per cent increase in third-quarter revenue, attributed to robust demand for its new products and business successes. Meanwhile, Qinetiq, a defense group, rose by 6.3 per cent after announcing a share buyback program of £100 million ($126.54 million) and reporting quarterly earnings in line with estimates.

(With Reuters inputs)