FTSE 100 stumbles as economy struggles to shake off virus woes

Credit: REUTERS/Peter Nicholls

By Sagarika Jaisinghani

Aug 28 (Reuters) - Early gains in London's FTSE 100 fizzled out on Friday as traders headed into the long weekend worried about a choppy post-pandemic economic rebound, while Greggs slipped on a report a COVID-19 outbreak had forced it to close its depot in Leeds.

The blue-chip FTSE 100 .FTSE was down 0.3%, heading for a subdued finish to the week following glum quarterly earnings reports and weak economic data in the past three sessions.

With Wall Street getting a boost overnight from the U.S. Federal Reserve's new strategy to adopt an average inflation target, all eyes in the UK will be on Bank of England chief Andrew Bailey's speech at the virtual Jackson Hole symposium on Friday. .N

"As markets have turned decidedly more risk-on, correction fears are mounting," Barclays analysts wrote in a note.

"A pullback is of course possible, but we remain of the view that the unwind of the massive flight to safety seen year-to-date is likely closer to the beginning than the end."

Historic global stimulus has put UK equity markets on course for their fourth monthly increase in five, but the pace of gains has slowed as economic data points to a slower-than-expected recovery from a pandemic-induced slump.

Data on Friday showed British business confidence has ticked up but remains far below usual levels, while employers are preparing to cut more jobs.

The UK's mid-cap FTSE 250 .FTMC lost 0.1%, with retailers .FTNMX5330, .FTNMX5370, homebuilders .FTNMX3720 and personal goods stocks .FTNMX3760 among the biggest decliners.

Earlier in the Asian day, Japanese financial markets fell after news that Prime Minister Shinzo Abe will resign for health reasons. MKTS/GLOB

In thin company news, baker Greggs GRG.L shed 1.3% as the report said its distribution centre had been temporarily closed for a deep clean after an undisclosed number of staff tested positive for COVID-19.

(Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Saumyadeb Chakrabarty and Shailesh Kuber)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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