Commodity stocks, inflation worries drag FTSE 100 to over 5-week low By Reuters

By Shivani Kumaresan and Devik Jain

(Reuters) -London’s FTSE 100 fell on Thursday, dragged down by losses in heavyweight commodity stocks and Burberry Group (LON:BRBY), while fears of a spike in inflation as the economy recovers hurt demand for equities.

The blue-chip index slipped 0.6% to its lowest level since April 7.

Miners such as Rio Tinto (LON:RIO), Anglo American (LON:AAL), and BHP Group and oil majors BP (LON:BP) and Royal Dutch Shell (LON:RDSa) were among the biggest drags, tracking lower crude and commodity prices. [O/R][MET/L]

The domestically focussed mid-cap FTSE 250 index declined 0.2%.

Globally, stocks slipped after a shocking rise in U.S. inflation bludgeoned Wall Street and sent bond yields surging on worries the Federal Reserve might have to move early on tightening. [MKTS/GLOB]

“Inflation fears have been stalking the market all week and are showing few signs of easing,” said Sophie Griffiths, market analyst, UK & EMEA, at OANDA.

“Whilst some inflation is good for companies and the market, the latest US consumer price data points to the balance moving too far in one direction.”

After rising 11% this year on reopening optimism, the FTSE 100 has pared some of those gains in the last few sessions on worries that central banks might tighten their ultra-loose monetary policies sooner than expected to curb inflation.

Luxury brand Burberry tumbled 4.2% on Thursday after it reported lower annual sales, hit by store closures and reduced tourism.

BT Group (LON:BT), Britain’s biggest broadband and mobile provider, slid 5.9% after it reported lower earnings for the year to end-March and forecast adjusted revenue to be broadly flat this year.

Canadian computer chip designer Alphawave IP Group (LON:IPO)’s shares tumbled 16.3% in their London market debut.

However, cyber security adviser NCC Group gained 14.2% after it proposed to buy the intellectual property management business of Iron Mountain Inc.