London’s FTSE 100 slips as industrial stocks fall

Global sentiment dampened on reports of Biden capital gains tax hikes on wealthy

Traders work during the closing bell at the New York Stock Exchange.

Traders work during the closing bell at the New York Stock Exchange.

 

London’s FTSE 100 slipped on Friday as industrial stocks fell and a stronger pound weighed on export-oriented companies, while investors awaited a flash reading on business survey data for April later in the day.

The exporter-heavy index declined 0.3 per cent, with large dollar-earning consumer staples companies British American Tobacco, Unilever and Diageo, slipping between 0.6 per cent and 1.1 per cent as the pound strengthened.

Aero and defence stocks lost 1.5 per cent, while heavyweight oil majors BP and Royal Dutch Shell also fell. Shares of both the companies were among the biggest drags to the index.

The domestically focussed mid-cap FTSE 250 index declined 0.3 per cent even as official data showed British retail sales soared past expectations to jump by 5.4 per cent in March from February before the lockdown eased.

A survey showed that consumer sentiment touched a 13-month high this month as the economy reopened partially.

Globally, sentiment was dampened on reports US president Joe Biden will propose tax hikes in capital gains on wealthy Americans.

“The reality is taxes may rise but certainly not as much as it is being touted,” said Michael Hewson, chief markets analyst at CMC Markets.

“Uncertainty levels about rising infections in India and Japan delaying a global recovery had already seen markets start the week on the back foot. So, it didn’t need much of a nudge for markets to turn tail.”

The FTSE 100 has gained 7.2 per cent so far this year on optimism that speedy Covid-19 vaccinations and constant policy support from the government would drive a stronger economic recovery.

However, it is set for its biggest weekly decline since the end of February as a recent spike in cases in parts of Asia has stoked fears of delayed global economic recovery.

Transport operator FirstGroup’s shares gained 10.8 per cent after the company agreed to sell two North American bus businesses to EQT Infrastructure for $4.6 billion, including debt. – Reuters