UK shares drop on Russian attacks and rate hikes fears

Markets ended last week in the red after strong US unemployment data dashed investors' hopes that the Fed would ease the pace of its rate hikes, following a lower-than-expected ISM Manufacturing reading on Monday.

Sentiment was further dented today with the news that Russia sent missiles to several cities in Ukraine. The FTSE 100 index was down 0.8% at 10:20am GMT.

The attacks severely hit the capital Kyiv, as Russia apparently retaliated after the explosion on the bridge to Crimea.

British power companies were at the bottom of the index, including Centrica, SSE and Drax, after a report from the Financial Times revealed that the UK government was planning to cap revenues of renewable electricity generators.

Meanwhile, the Bank of England has announced a new set of measures to improve the stability of UK bond markets, including an increase in the purchase of long-dated UK bonds.

Among stocks, DS Smith jumped 10.8% after the card board maker said it sees annual performance ahead of expectations.

 

Things to read today:

Wall Street banks slash $34 bln from earnings forecasts for big companies (Financial Times)

Putin’s Regime Faces the Fate of His Kerch Strait Bridge (The Atlantic)

Kwasi Kwarteng buckles up for an awkward first date with the IMF (The Guardian)