By Carla Mozee, MarketWatch

Barclays to raise dividend, shares jump

U.K. stocks fell by the most in two weeks Thursday, with broad-based losses appearing after Federal Reserve meeting minutes suggested policy makers will raise U.S. borrowing rates at a faster-than-expected pace.

Stocks were stuck in the red after data indicated U.K. economic growth wasn't as strong as previously estimated. Among the market's few advancers was banking heavyweight Barclays PLC after the release of its financial results.

How markets are moving

The FTSE 100 indexfell 1% to 7,212.59, on course for its worst session since Feb.9, according to FactSet data . All but the utility and health care sectors advanced. The consumer goods and industrials sectors lost the most. On Thursday, the benchmark rose 0.5% (http://www.marketwatch.com/story/ftse-100-slips-as-gains-for-lloyds-glencore-fail-to-spread-cheer-2018-02-21).

The pound fell to $1.3886 from $1.3919 late Wednesday in New York.

The yield on the 10-year gilt rose 1 basis point to 1.56%, according to Tradeweb. Yields rise when prices fall.

Check out: More investors looking to cut U.K. assets as Brexit uncertainty persists (http://www.marketwatch.com/story/more-investors-looking-to-cut-uk-assets-as-brexit-uncertainty-persists-2018-02-16)

What's driving markets

Investors yanked down U.K. and European equities as U.S. stock futures slumped early Thursday (http://www.marketwatch.com/story/dow-futures-slide-more-than-100-points-as-fed-driven-jitters-persist-2018-02-22) in the wake of Wall Street's selloff Wednesday.

U.S. stocks retreated from a rally Wednesday (http://www.marketwatch.com/story/dow-futures-inch-lower-as-investors-brace-for-fed-minutes-2018-02-21) after minutes of the Fed's January meeting (https://www.federalreserve.gov/monetarypolicy/fomcminutes20180131.htm) showed officials see an "increased likelihood" of further interest rate hikes, heightening prospects of a rate rise in March. Policy makers now see the world's largest economy getting stronger than it was at the end of 2017.

That news helped push the U.S. 10-year Treasury note yield up closer to the 3% mark, and lifted the U.S. dollar . In turn, the stronger greenback pulled down prices of dollar-denominated commodities such as copper , gold and oil (http://www.marketwatch.com/story/oil-prices-slump-as-dollar-gets-boost-from-hawkish-fed-minutes-2018-02-22) and those moves hurt shares of metal and energy producers. Shares of oil giants Royal Dutch Shell PLC (RDSB.LN) and BP PLC (BP.LN) fell 0.5%, respectively, in London trade.

Economic data

The Office for National Statistics revised down its previous estimate of U.K. GDP growth (https://www.marketwatch.com/story/uk-economy-lagged-more-than-thought-in-2017-2018-02-22https:/www.marketwatch.com/story/uk-economy-lagged-more-than-thought-in-2017-2018-02-22) in the fourth quarter to 1.4% from 1.5% year-on-year. The shutdown of a major oilfield for repairs in December hit oil-and-gas production harder than first believed, the ONS said.

What strategists are saying

"That stock markets remain in a volatile state is perfectly illustrated by the latest session on Wall Street. Just as it seemed traders had acclimatized to inflation, rising interest rates and higher bond yields, the fears that caused this month's crash were reignited by minutes from the Federal Reserve's last meeting," said Lee Wild, Interactive Investors's head of equity strategy, in a note.

"We've known for some time that U.S. policy makers might squeeze in extra rate hikes in 2018, so it's possible this new sell-off is just a knee-jerk reaction to the minutes. However, the Fed must prevent [U.S. President Donald] Trump's pro-business reforms overheating the U.S. economy, and there's risk here that central bankers mismanage the rate-hike cycle," said Wild.

Stock movers

Barclays shares (BCS) surged 5.7% after the bank said it would more than double its dividend next year (http://www.marketwatch.com/story/barclays-swings-to-loss-vows-to-double-dividend-2018-02-22-34852558) even as the bank swung to a full-year loss of GBP1.9 billion ($2.64 billion).

Centrica PLC (CNA.LN) climbed 4% as the British Gas parent said it will cut 4,000 jobs by 2020 in an aim to reduce costs. Annual adjusted operating profit dropped 17% to GBP1.25 billion.

Anglo American PLC shares (AAL.LN) dropped 3.3% after the miner posted 2017 net profit of $3.17 billion (http://www.marketwatch.com/story/anglo-american-profit-almost-doubles-in-2017-2018-02-22), missing the $3.25 billion consensus estimate from FactSet.

British American Tobacco PLC (BATS.LN) fell 4.7%. The maker of Lucky Strike and Dunhill cigarettes (http://www.marketwatch.com/story/bat-2017-profit-soars-on-reynolds-american-buy-2018-02-22) said its pretax profit increased more than fourfold in 2017, on gains related to the acquisition of Reynolds American Inc. and credits related to U.S. tax reform. Volume of sales of cigarette and tobacco-heated products fell 2.6%.

 

(END) Dow Jones Newswires

February 22, 2018 06:26 ET (11:26 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
FTSE 100
Gráfica de índice
De Feb 2024 a Mar 2024 Haga Click aquí para más Gráficas FTSE 100.
FTSE 100
Gráfica de índice
De Mar 2023 a Mar 2024 Haga Click aquí para más Gráficas FTSE 100.