- Prudential drops on plans to raise $2.9 bln in Hong Kong
- Britain considers offering state-backed loans to energy firms
- Banking sub-index drops to lowest since February
- FTSE 100 down 0.9%, FTSE 250 off 1.1%
Sept 20 (Reuters) – London’s FTSE 100 ended at a two-month low on Monday, dragged down by heavyweight miners and banking stocks, while concerns about rising inflation also weighed on the index ahead of a rate decision by the Bank of England (BoE) this week.
Banking shares (.FTNMX301010) were the biggest fallers with their sub-index down 4%, tracking benchmark bond yields lower as investors sought safety in government bonds on concern over the problems at Chinese property group China Evergrande.
Investors now await the BoE’s policy meeting this week for a timeline on its plan to ease its massive pandemic stimulus against the backdrop of rising inflation pressures from supply chain disruptions and higher energy prices.
“It is quite clear there is a growing sense of unease about the economic outlook as a growing number of companies look ahead to the prospect of rising costs, and the possible effects on their profit margins, at a time when central banks are coming under pressure to pull back on the generosity of their current stimulus measures,” said Michael Hewson, chief market analyst at CMC Markets UK.
The FTSE 100 is still on track to record gains for this year, but the pace of those gains has recently slowed after it fell for three straight weeks over concerns of rising costs and evidence of slowing economic growth.
Britain’s Prudential Plc (PRU.L) ended 8.4% lower to be the heaviest loser on the FTSE 100 after saying on Saturday it plans to raise HK$22.5 billion ($2.9 billion) through a concurrent public offer and international share placing on the Hong Kong Stock Exchange.
On a positive note, British travel stocks gained on reports that the U.S. is planning to relax travel curbs on vaccinated passengers from the European Union and Britain. read more
The domestically focused mid-cap index (.FTMC) fell 1.1%.
Reporting by Shashank Nayar in Bengaluru; editing by Uttaresh.V and Hugh Lawson
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