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FTSE 100 slides on US rate rise worries | FTSE 100 slides on US rate rise worries |
(about 5 hours later) | |
(Close): The UK market joined in a global sell-off, triggered by fears that the Federal Reserve could raise US interest rates as soon as next week. | |
Markets were rattled by Friday's comments from Boston Fed president Eric Rosengren that higher rates are needed to stop the US economy overheating. | Markets were rattled by Friday's comments from Boston Fed president Eric Rosengren that higher rates are needed to stop the US economy overheating. |
The FTSE 100 closed down 76.05 points, or 1.1%, at 6,700.9 marking its lowest level since 3 August. | |
Paris and Frankfurt also closed down 1%, following similar falls in Asia. | |
"With little on the economic agenda, a severe bout of panic has struck the global markets, causing the kind of declines not seen since the Brexit," said Connor Campbell, a financial analyst at SpreadEx. | |
Takeover offer | Takeover offer |
The biggest faller on the FTSE 100 was Associated British Foods (ABF), which dropped almost 11%. | |
The company sales at its Primark discount clothing chain had been affected by unseasonable weather, with like-for-like sales at the chain likely to fall by 2% this year. | The company sales at its Primark discount clothing chain had been affected by unseasonable weather, with like-for-like sales at the chain likely to fall by 2% this year. |
In addition, ABF said its pension scheme was set to hit a £200m deficit, against a surplus last year, which it blamed on a "marked decline in UK long-term bond yields". | In addition, ABF said its pension scheme was set to hit a £200m deficit, against a surplus last year, which it blamed on a "marked decline in UK long-term bond yields". |
Neil Wilson at ETX Capital said the pension deficit was "a concern", adding that the change "chimes with what we're seeing elsewhere as record low bond yields are wreaking havoc with company pensions". | Neil Wilson at ETX Capital said the pension deficit was "a concern", adding that the change "chimes with what we're seeing elsewhere as record low bond yields are wreaking havoc with company pensions". |
In the FTSE 250, shares in private equity investor SVG Capital jumped nearly 15% to 650p after it received a takeover offer from US firm HarbourVest Partners. | In the FTSE 250, shares in private equity investor SVG Capital jumped nearly 15% to 650p after it received a takeover offer from US firm HarbourVest Partners. |
HarbourVest said it had offered £1.02bn for the UK firm, with shareholders set to receive 650p a share. | HarbourVest said it had offered £1.02bn for the UK firm, with shareholders set to receive 650p a share. |
On the currency markets, the pound rose 0.35% against the dollar at $1.33130, and was also up 0.36% against the euro at €1.1858. |