FTSE 100 Index Slides Amidst Geopolitical Tensions
The UK’s FTSE 100 index lost 0.81% on Friday as concerns grow regarding the geopolitical situation in the Middle East ahead of the release of new projections for the UK economy.
Market watchers are closely monitoring the situation in the Middle East on suspicions that Israel’s fatal airstrike on an Iranian embassy compound in Syria’s capital Damascus will escalate tensions in the region and elicit a retaliation.
In other news, the week ahead will see the release of the February gross domestic product report for the UK. The economy is widely expected to grow 0.1% month over month compared with a 0.2% gain in January.
“For the Bank of England though, this isn’t what will determine the timing of the first rate. Instead, that’ll be down to services inflation and wage growth, both due later this month. It’s a close call between a June and August rate cut – though for now, we’re narrowly sticking with the latter,” ING commented. Oil Rallies this Week, Prices Remain Range Bound
Meanwhile, total activity in the UK’s construction industry jumped back to expansion territory in March 2024 and rose to its highest level since August 2023. The S&P Global UK Construction Purchasing Managers’ Index came in at 50.2, compared with 49.7 a month earlier.
“UK construction output returned to growth in March as a renewed expansion of civil engineering work was supported by more stable conditions in the housing and commercial building segments. The marginal overall rise in total construction activity ended six months of contraction,” said S&P Global Market Intelligence economics director Tim Moore.
Meanwhile, the annual growth of average house prices in the UK slowed in March to 0.3% from 1.6% in February, according to Halifax. Month over month, average house prices declined 1%, compared with the 0.3% growth in the previous month.
On the corporate front, Shell flagged a corporate adjusted loss of between $400 million and $600 million in the first quarter of 2024. At closing, the British energy giant rose 0.58%.
