The FTSE 100 is expected to open sharply lower on Friday, as a month-long rally shows signs of cooling amid growing expectations that the Federal Reserve may delay cutting interest rates in the aftermath of the U.S. government shutdown.
London’s blue-chip index has been called 68 points down on the futures market, extending yesterday’s 104-point decline that pulled the FTSE to 9,807.68, a drop of just over 1% and its steepest slide in weeks.
Wall Street also suffered a broad sell-off. The Nasdaq Composite tumbled 2.3%, while both the Dow Jones Industrial Average and the S&P 500 fell 1.7%, as traders reassessed expectations for a December rate cut.
“What likely triggered yesterday’s selloff was the growing realisation that a full set of jobs and inflation data won’t land before the Federal Reserve’s December meeting,” said Ipek Ozkardeskaya, senior analyst at Swissquote. “And if that’s the case — and if the Fed retains even a minimum degree of independence and reason — it wouldn’t cut rates blindly.”
Asian markets followed the negative tone. Tokyo’s Nikkei slid 1.7%, Hong Kong’s Hang Seng fell 1.9%, and the Shanghai Composite dropped 1%. Elsewhere, Mumbai’s BSE Sensex dipped 0.3%, while Sydney’s ASX 200 lost 1.4%.
