A see-saw session on Wall Street overnight spoke to an edgy market mood and the FTSE 100 started the day firmly on the back foot on Friday.
Barclays topped the losers’ list, reflecting the tricky position for the banks, with some European shares in the sector chalking up big losses on lingering fears of contagion and the threat of regulatory intervention. It is difficult to see a path through the current turmoil around inflation, rates, geopolitical tensions and the recent banking crisis which doesn’t involve some pain.
AJ Bell investment director Russ Mould said: “At best there is a good deal more uncertainty than there was a month ago and if there’s one thing which markets cannot stand it is uncertainty. We may be close to the end of the rate hiking cycle, certainly the Federal Reserve hinted as much earlier this week, but we are certainly not out of the woods yet.
“UK retail sales topped expectations in February as they rose from January’s lows, though they were still weaker year-on-year, and despite some improvement consumer confidence could still be characterised as fragile at best.
“European PMI data shows a big divergence between the services and manufacturing sector. It could be the latter is a canary in the coal mine for a more pronounced economic slowdown.
“The next big economic announcement looks to be the PCE data in the US a week today – this is the Fed’s preferred measure of inflation and if it comes in higher than forecast it could lead to a sudden about-turn on the Fed’s recent shift in tone.”