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HomeBusinessLondon stocks open lower on recession fears

London stocks open lower on recession fears

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UK’s benchmark indexes extended their slide on Friday, led by a decline in homebuilders, as investors’ concerns over recession heightened following the Bank of England’s outsized interest rate hike.

The benchmark FTSE 100 was down 0.2 percent at 0706 GMT, while the FTSE 250 mid-cap index lost 0.4 percent.

Both indexes were on track for their worst weekly drop since the U.S. banking turmoil in March.

READ ALSO: Nigeria shares N786 bln from revenue generated in May among FG, States, LGs ~FAAC

The BoE delivered a larger-than-expected 50-basis-point rate hike on Thursday following an inflation scare, with investors ramping up their bets of rates peaking at 6.1 percent in February and a likely recession.

Retail sales, however, unexpectedly rose in May, suggesting most consumers were coping with rigid inflation’s impact on their spending power.

Prospects of policy tightening lasting for longer bruised risk sentiment following a hawkish U.S. Federal Reserve and rate hikes by major central banks including in Norway and Switzerland on Thursday.

While rate-sensitive homebuilders slid 2.8 percent, the healthcare sector rose on a 3 percent gain in GSK after the drugmaker reached a litigation settlement in the U.S. over its heartburn drug Zantac.

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