UK midcaps end at two-month lows in dour start to new quarter

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(Businesshala) – British mid-cap shares closed two-month lows on Friday as warnings from electrical goods retailer AO World and pub operator JD Weatherspoon fueled supply chain disruptions and concerns about higher energy prices. Expressed.

FILE PHOTO: The offices of the London Stock Exchange Group can be seen in the City of London on December 29, 2017. Businesshala/Toby Melville/File photo

Hurt by declines in travel and leisure stocks, the domestically focused mid-cap index fell 0.3% to record its worst week since October last year.

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The blue-chip FTSE 100 index fell 1.0% as a stronger pound put pressure on dollar earners on the index.

AO World fell 24.3% after declining first-half revenue due to a lack of delivery drivers, while Weatherspoon gained 2.5% despite nearly doubling its annual loss.

“In the United Kingdom, there has been an alarming drop in business confidence in the span of a month, with optimism emanating from vaccine roll-out sentiment like a distant memory amid a fuel, supply chain and cost of life crisis,” AJ Bell’s investment director Russ Mold said.

For the year so far, the FTSE 100 is up nearly 9% and the mid-cap FTSE 250 index up 11%, on the back of reopening optimism and easing central bank policies.

However, supply chain disruptions and increasing cost pressures from higher energy prices have weighed on the UK economy, putting the mid-cap index on track after a fourth consecutive weekly decline.

There are going to be some more economic recovery and some more gains in equity markets, but from now on, the gains will be relatively small as the pace of recovery is expected to slow in the United States and China, said Franziska Palmas, capital markets economist at Economics.

Among other stocks, software company Sage fell 1.3% after it said it would cut more than 800 jobs worldwide.

GlaxoSmithKline dropped 1.3% after ending collaboration with Germany’s Merck KGA on cancer treatment.

Reporting by Bansari Mayur Kamdar and Amal S; Editing by Sriraj Kalluvilla and Uttaresh

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