Yahoo News Wall Street on track for losing week as FTSE closes lower
A look at how the major markets are performing on Friday
The FTSE 100 and European stocks finished lower this Friday after the Bank of England raised interest rates by half a point, following the Fed and other central banks in increasing borrowing costs.
The FTSE 100 (^FTSE) lost 0.54% to 7,461 points, while the CAC 40 (^FCHI) in Paris slipped 0.62% to 7,158 points. In Germany, the DAX (^GDAXI) fell 1.04% to 15,821.
US stocks fell at the open on Friday, setting the major US benchmarks up for a losing week as investors come to terms with the prospect of more interest rate hikes ahead from the Federal Reserve.
The S&P 500 (^GSPC) opened 0.85% lower, while the Dow Jones Industrial Average (^DJI) dropped almost 300 points, or 0.88%. The tech-heavy Nasdaq Composite (^IXIC) led the declines, down about 1%. All three are on course to break a run of weekly wins if the losses hold.
"Global markets have continued to struggle over the last 24 hours, with a fresh selloff for sovereign bonds and further equity declines across most regions," Henry Allen, macro-strategist at Deutsche Bank, said.
"Several factors have been behind this, but the biggest was the dawning realisation for investors that central banks are set to keep hiking rates into the second half of the year, particularly after a surprise 50bps move from the Bank of England," he added.
Interest rates will average around 5.5% over the next three years following “policy failure” at the Bank of England, according to an investment chief.
Charles White-Thomson, chief executive of trading and investment firm Saxo UK, said he supported the half a point jump in interest rates to 5% announced on Thursday as the Bank of England needed to get ahead of inflation having been “behind the curve”.
Watch: Bank of England increase interest rates to 5%
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