London stocks fell on Friday, with shares of insurance companies under particular pressure after the UK Supreme Court ruled businesses need to be covered for losses stemming from COVID-19 locks.
FTSE 100 UKX index,
fell 0.9% to 6,736.31 and was expected to fall around 2% for the week. Not GBPUSD,
just as weak, off 0.5% to $ 1.3615 as the dollar rose across the board.
The lower movements were in step for a loss over global markets, which had gathered ahead of President Joe Biden’s stimulus plan and then reaped those gains after announcing a $ 1.9 trillion stimulus package to add against the effects of the pandemic late Thursday.
Stock sales hit areas that are aiming for value that are likely to gain hope of strengthening economies, such as commodity plays. Oil prices, which have also benefited from the rally, fell more than 1%, slowing shares of BP BP by high pressure,
BP,
and Royal Dutch Shell RDS.A,
RDSA,
both down more than 1% each.
Mining stocks also pulled down the index, with shares of Rio Tinto RIO,
RIO,
far 3% and Anglo American AAL,
down 4.8%.
“Expectations for higher inflation have driven cyclical stocks such as commodity producers, which is a key reason why the FTSE 100 performed so well in early 2021 with miners and oil companies leading the way,” Russ said. Mold, investment director at AJ Bell, in a note to clients.
UK insurers were under scrutiny after the country’s Supreme Court appealed by insurers against claims brought by businesses through the COVID-19 pandemic and lockouts. The UK Financial Conduct Authority had first introduced the suit, representing 370,000 policymakers affected by this. The Financial Times reported that the regulation could affect 700 types of insurance policies from 60 insurers.
Huw Evans, chief executive of the Association of British Insurers, said in a statement that his organization welcomed the “clarity that the judgment will bring to a number of complex cases,” and that all “valid” claims will be paid. Out so fast. able. ”
“The insurance industry expects to pay out over £ 1.8 billion ($ 2.5 billion) in COVID-19-related claims across a range of outputs, including business bankruptcy policies,” Evans said. .
Shares of insurers were in the red across the board, with Legal & General LGEN,
DLG straight line,
and Beazley BEZ,
down more than 1% each. Sections of prudent PRU,
fell 0.4%.
One bright spot in London was information technology company Aveva AVV,
its shares rose 5.7% after saying that revenue growth rose in the first nine months of the 2021 crown and was encouraging in its full-year outlook.