London Stocks Plummet as Oil Prices Rise Amid Inflation Fears
Stocks in London fell on Wednesday due to a combination of factors including elevated oil prices and bond yields. The FTSE 100 index closed down 32.83 points, or 0.3%, at 10,756.45.
The higher oil prices are putting pressure on investors, who are now facing an 'inflation monster' that could become stronger unless action is taken. Dan Coatsworth, head of markets at AJ Bell, stated that financial markets are being brought down by a 'cocktail of worries' including interest rate hikes, geopolitical concerns, and fears about economic growth expectations.
The UK's bond yields widened on Wednesday, with the 10-year gilt hitting 5.24% from 5.22% on Tuesday. This is seen as a 'deeply uncomfortable' fiscal position for the country. Kathleen Brooks, research director at XTB, noted that interest rate futures market is pricing in more than three rate hikes between now and July.