British shares weaken as oil spike stokes inflation worries

2 minute read

A British pound coin is seen in front of displayed stock graph in this illustration taken, November 9, 2021. REUTERS/Dado Ruvic/Illustration

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  • Amigo jumps on UK watchdog approval to restart lending
  • Spectris ends $2.4 bln pursuit of Oxford Instruments
  • FTSE 100 down 0.4%, FTSE 250 off 1.1%

March 7 (Reuters) - London's FTSE 100 hit a more than seven month-low on Monday, before recouping most of its losses as soaring crude prices pushed oil and gas stocks higher, while investors remained cautious as rising energy costs fuelled inflationary concerns.

The blue-chip index (.FTSE) ended 0.4% lower after earlier falling as much as 2.8%, with consumer staple stocks like Diageo (DGE.L), Unilever (ULVR.L), British American Tobacco (BATS.L) and Reckitt Benckiser (RKT.L) leading decline.

Energy shares (.FTNMX601010) jumped 6.6% as oil prices spiked to their highest levels since 2008 as the risk of U.S. and European bans on Russian crude imports threatened supply chains. read more

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The price rise also stoked inflation fears and added to economic growth worries, as oil prices have already gained 60% so far in 2022.

"Investor sentiment has been hit hard. All the hopes of a strong recovery this year have started waning slowly and inflation worries have taken the centerstage," said Kunal Sawhney, chief executive at research firm Kalkine.

Russia told Ukraine it was ready to halt military operations "in a moment" if Kyiv meets a list of conditions, a Kremlin spokesperson said. read more

The domestically focused mid-cap index (.FTMC) fell 1.1% with travel and leisure stocks (.FTNMX405010) among top losers.

Among stocks, Amigo Holdings Plc (AMGO.L) soared 136.4% after Britain's financial regulator said the sub-prime lender could restart lending if it meets certain conditions and its new business rescue plan is approved by the London High Court. read more

Spectris Plc (SXS.L) rose 4.0% after the electrical engineering company terminated talks regarding a possible 1.79 billion pound ($2.37 billion) buyout bid for Oxford Instruments (OXIG.L). read more

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Reporting by Amal S and Shashank Nayar in Bengaluru Editing by Rashmi Aich and Mark Potter

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