FTSE 100 logs worst day in a month as rate, political uncertainty weigh

Pranav Kashyap and Purvi Agarwal
Updated ·2-min read
FILE PHOTO: The outside of the London Stock Exchange building is seen in the City of London.

By Pranav Kashyap and Purvi Agarwal

(Reuters) -Britain's FTSE 100 extended declines on Tuesday, as uncertainty over interest rate cuts in the U.S. and the domestic political landscape weighed on sentiment, while markets awaited Bank of England Governor Andrew Bailey's comments later in the week.

The blue-chip FTSE 100 was down 0.8%, logging its worst day in over a month and marking its longest losing streak since August 2023. The mid-cap FTSE 250 closed 0.3% lower.

The pound was last trading at $1.278, after hitting a two-month high against the greenback.

The travel and leisure shares led losses among sectors, with a 3.3% decline, pulled down by Flutter Entertainment .

The online sports betting operator fell to the bottom of the FTSE 100 with a 7.3% loss after the Illinois Senate passed a sport-betting tax hike as a part of its budget on Sunday.

Automobile and parts sector was the top gainer with a 3.4% surge, snapping its six-session losing streak, while precious metal miners also rose 3.1%, tracking higher gold prices. [GOL/]

Meanwhile, Minneapolis Federal Reserve Bank President Neel Kashkari said in an interview with CNBC on Tuesday that the U.S. central bank should wait for significant progress on inflation before cutting interest rates.

"There is uncertainty for multinationals listed in London about interest rates lingering for longer in the U.S.," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

The ongoing election campaign in the UK also added political uncertainty and unsettled markets, Streeter said.

Market focus will now shift to comments from BoE Governor Bailey on Thursday for more insight into the timing of the central bank's interest rate cut.

Among other stocks, online supermarket Ocado was the top gainer on FTSE 100 with a 9.8% jump.

Meanwhile, prices in British shops rose at the slowest pace in 2-1/2 years this month.

(Reporting by Pranav Kashyap and Purvi Agarwal in Bengaluru; Editing by Savio D'Souza, Varun H K and Nick Macfie)

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