Stocks slip amid uncertainty over US interest rates.
The FTSE 100 closed lower on Thursday ahead of the Easter break as a drop in oil prices weighed on sentiment and as official data revealed UK retail sales fell in March. Further somewhat hawkish comments from a top US central bank official added to the downbeat mood.
By the end of trading, the Footsie was 92.63 points or 1.49% lower at 6,106.48 points.
Oil prices were under pressure after the Energy Information Administration on Wednesday reported US crude stocks rose by 9.4m barrels to 532.5m barrels in the week ended 18 March. Analysts had forecast an increase of 2.5m barrels.
In economic data, UK retail sales dropped 0.4% month-on-month in February as cold weather delayed the purchases of spring and summer attire, the Office for National Statistics revealed. Analysts had forecast a 1.0% decrease in February, after rising the most in more than two years in January.
“Shoppers tend to be tight-fisted after the January sales, but deeper concerns surrounding a possible Brexit might be making them think twice before spending,” said Dennis de Jong, managing director at UFX.com.
Across the Atlantic, the Commerce Department said US durable goods orders fell 2.8% on the previous month, slightly better than the consensus estimate for a 3% decrease and down from the revised increase of 4.2% the month before.
Markit’s purchasing managers’ index on US manufacturing rose to 51.4 in March from 51.3 in February, missing expectations for a reading of 51.5 but above the 50 level that separates an expansion from a contraction.
The Labor Department revealed US initial jobless claims rose by 6,000 to 265,000, versus economists’ expectations for an increase to 268,000.
St Louis Federal Reserve President James Bullard said on Thursday another US interest rate “may not be far off” as the labour market had improved since December.
Bullard, who voted to support the Fed’s decision in March to keep interest rates unchanged, said: “As it turns out, the decision to pause seems to have put more weight on the global and U.S. growth downgrade,” he said in prepared remarks.
As always, additional rate increases would be conditional on the economy evolving as expected, he explained.
His remarks echoed those made since 18 March by at least three other Fed presidents.