(Sharecast News) - London stocks were in the red on Friday morning, after the release of data showing that expectations for the UK economy were at their lowest ebb since 2008, and following hawkish comments from Fed chair Jerome Powell overnight.
At 0858 BST, the FTSE 100 was down 0.35% at 7,601.17, and the FTSE 250 was 0.45% weaker at 21,064.03.
"Remarks from Fed Chair Powell were the main cause of the turnaround, as he stated that it was 'appropriate' to be 'moving a little more quickly' and that 'there's something in the idea of front-end loading whatever accommodation one thinks is appropriate'," noted Interactive Investor head of markets Richard Hunter.
"Quite apart from the widely expected 0.5% rate hike in May, this could also imply similar rises in subsequent months.
"While the news should not have come as too much of a surprise, investors rushed for the exit as concerns of over-tightening and recession came back into focus."
Sentiment was spooked overnight after Fed head Powell said at an event hosted by the International Monetary Fund overnight that "there's something in the idea of front loading".
That sent Wall Street stocks below the line and government bond yields higher, with the 10-year US Treasury note yield now close to the psychologically-important 3.0% mark.
On home shores, Britons' outlook for the economy sank to its lowest level since the Great Financial Crisis, the results of a closely-followed survey revealed.
Consultancy GfK's consumer confidence index for Britain slipped by seven points in April from the month before to reach a reading of -38.0.
Economists had pencilled in a print of -33.0.
"The cost crunch is really hitting the pockets of UK consumers and the headline confidence score has dropped to a near historic low," said Joe Staton, client strategy director at GfK.
A sub-index tracking views on the economy 12 months out meanwhile retreated by six points to a reading of -55.0.
Elsewhere, UK retail sales fell more than expected in March, as surging inflation hit demand for food and petrol, according to official data released on Friday.
Retail sales volumes fell by 1.4% last month compared with February, the Office for National Statistics said, worse than expectations for a 0.3% monthly drop.
Sales of food and petrol, where prices have spiralled in recent months, fell sharply, the ONS said.
Online retail sales, which boomed during Covid pandemic lockdowns, also fell, it added.
"In cutting back on their spending, consumers will also have had one eye on the upcoming surge in energy bills, as well as other price rises, which will have hit their wallets in April," said CMC Markets chief analyst Michael Hewson.
"We also can't forget to mention the fiscal own goal of the Chancellor of the Exchequer (finance minister) Rishi Sunak in going through with his National Insurance tax hikes, against a chorus of voices urging him to defer them. He can't say he wasn't warned.
"However this is spun, this consumer slowdown is very much one of the government's own makings and is likely to make for a difficult summer for business and consumers alike."
Hewson said Friday's figures would also factor into debate among Bank of England policymakers over whether to raise interest rates next month by 50 or 25 basis points.
In equities, B&M European Value Retail was in the red by almost 6% after chief executive Simon Arora said he planned to retire in 12 months, after 17 years at the helm of the variety goods chain.
Arora bought the group in December 2004 with his brother Bobby, and expanded its estate to more than 1,100 stores from 21.
Real estate investment trust LXI REIT was slightly weaker after reporting a number of transactions, disposing of one property and acquiring another two.
The company disposed of a property let to Premier Inn, B&M, Pure Gym, Pets at Home and Costa for £19.33m, and agreed to purchase an M&S Simply Food store and a MKM trade unit for a combined £9.44m, as well as a food store in North Ayrshire through a pre-let forward funding deal.
Pantheon International was also in the red, despite reporting a 4% improvement in its unaudited net asset value per share in March to 434.2p.
On the upside, Ukraine-focussed mining firm Ferrexpo was ahead almost 5% after saying it had been forced to delay a decision on paying a dividend, following Russia's invasion of the country.
Ferrexpo, which also said it would pause projects not expected to deliver near-term growth, said all its operations in Ukraine were away from the main conflict zones, but highlighted that the war had created many operational and logistical challenges.
In broker note action, Anglo American was down after RBC Capital Markets cut its target price to 3,400.0p from 4,400.0p, and downgraded its view on the stock to 'sector perform' from 'outperform'.
Going the other way, Berkeley Group was in positive territory after Jefferies upgraded its recommendation to 'buy' from 'hold', and raised its target price to 5,587.0p from 4,703.0p.
Market Movers
FTSE 100 (UKX) 7,587.15 -0.53%
FTSE 250 (MCX) 21,047.96 -0.53%
techMARK (TASX) 4,401.06 -0.30%
FTSE 100 - Risers
Berkeley Group Holdings (The) (BKG) 4,201.00p 3.12%
Intertek Group (ITRK) 5,134.00p 1.42%
United Utilities Group (UU.) 1,136.00p 1.34%
Rentokil Initial (RTO) 531.00p 1.34%
British American Tobacco (BATS) 3,382.50p 1.14%
National Grid (NG.) 1,175.50p 1.12%
BAE Systems (BA.) 749.20p 1.08%
CRH (CDI) (CRH) 3,286.00p 1.08%
Severn Trent (SVT) 3,051.00p 0.99%
SSE (SSE) 1,832.00p 0.99%
FTSE 100 - Fallers
B&M European Value Retail S.A. (DI) (BME) 517.80p -5.85%
Anglo American (AAL) 3,552.50p -3.44%
Ashtead Group (AHT) 4,714.00p -2.14%
Experian (EXPN) 2,725.00p -2.12%
Entain (ENT) 1,506.00p -2.11%
Scottish Mortgage Inv Trust (SMT) 913.40p -2.00%
Burberry Group (BRBY) 1,638.50p -1.97%
Hargreaves Lansdown (HL.) 968.20p -1.83%
Ocado Group (OCDO) 1,071.00p -1.74%
Rolls-Royce Holdings (RR.) 95.03p -1.63%
FTSE 250 - Risers
Polymetal International (POLY) 279.90p 11.96%
Homeserve (HSV) 944.00p 10.60%
Ferrexpo (FXPO) 182.80p 4.52%
Shaftesbury (SHB) 620.00p 2.23%
QinetiQ Group (QQ.) 346.80p 1.70%
NB Private Equity Partners Ltd. (NBPE) 1,625.00p 1.56%
Pennon Group (PNN) 1,069.00p 1.42%
Abrdn Private Equity Opportunities Trust (APEO) 500.00p 1.21%
Vivo Energy (VVO) 140.20p 1.01%
Tyman (TYMN) 309.50p 0.98%
FTSE 250 - Fallers
Trustpilot Group (TRST) 124.80p -6.59%
Baltic Classifieds Group (BCG) 147.20p -4.42%
Aston Martin Lagonda Global Holdings (AML) 870.60p -3.29%
Liontrust Asset Management (LIO) 1,208.00p -3.05%
Weir Group (WEIR) 1,628.50p -2.66%
Marks & Spencer Group (MKS) 150.90p -2.49%
Bridgepoint Group (Reg S) (BPT) 323.40p -2.47%
Dr. Martens (DOCS) 238.40p -2.45%
BlackRock World Mining Trust (BRWM) 748.00p -2.35%
Ashmore Group (ASHM) 232.40p -2.27%