Rate hike fears cripple the LSE

Business sentiment is improving in the UK, with the composite PMI rising to 53 in February from 48.5 in January. This is much higher than the 49 expected by economists. This looks like a good news, but investors are not happy since this fuels expectations that the BoE will act to cool down inflation and the economy by further raising rates. The FTSE 100 dropped 0.5%.

A strong PMI reading for the US only added to rate hike fears and sent the three main US indexes down by 2.0%.

Investors are now awaiting the minutes of the U.S. Federal Reserve's January meeting, due later today.

This morning, the FTSE 100 was down 0.8%. Shares of Lloyds dropped 2.1% after it posted a flat annual profit for 2022, hampered by higher bad loan provisions.

Miner Rio Tinto fell 1.8% after unveiling a 38% drop in annual profit.

 

Things to read today:

US Stocks record worst day in two months on rate rise worries (Financial Times)

Goldman Says Hedge Funds Primed to Gain From Stock Picking Boost (Bloomberg)