The FTSE 100 fell to a fresh two-week low as concerns over major interest rate rises weighed on trading sentiment.

Sweden’s Riksbank was the first of many central banks to change interest rates this week, and its decision to sharply raise rates quickly unsettled markets Europe before Federal Reserve System and the Bank of England meet.

The threat of a jump in interest rates was particularly difficult for developers, with Khurma and Barratt fall, against the background of fears, an increase will hit the demand for mortgages.

Leaders in London ended the day down 44.02 points, or 0.61%, to 7,192.66 points.

Michael Hewson, chief market analyst at CMC Markets UK, said: “European markets initially started the day in positive territory, but the gains soon faded after Sweden’s Riksbank made a strong 100 basis point rate hike, pushing its key rate to 1.75%.

“The size of the hike shifted the focus back to tomorrow’s Fed rate decision and the possibility that the US central bank could do something similarly aggressive.

“This seems like a stretch given that US rates are already quite a bit higher than Swedish rates, however in this case discretion seems to be the better part of valor and markets have moved lower as rates have gone higher.”

By the end of the session, Germany’s Dax was down 1.03%, while France’s Cac was down 1.35%.

Meanwhile, sterling edged closer to a 37-year low hit last week as the dollar strengthened again.

The pound was down 0.09% against the dollar at 1.140 and was also 0.09% lower against the euro at 1.141 at the close.

In company news, B&Q owner Kingfisher is in the red after reporting a 30% drop in profits as the company grapples with higher raw material and energy prices and sales slow following the pandemic DIY boom.

The FTSE 100 firm said its adjusted pre-tax profit fell sharply by 29.5% to £472m in the first half, compared with £669m a year ago.

Shares in the DIY giant fell 9.7p to 237.6p as a result.

Consumer healthcare specialist Haleon, spun off from GlaxoSmithKline earlier this year, finished higher after reporting double-digit revenue and profit growth in the company’s first results.

Shares rose 6.05p to 265.45p at the close of play.

Ocado Group found itself near the foot of the FTSE 100 after analysts at HSBC downgraded the retail technology company amid concerns about smaller customer purchases. It closed 64.6p lower at 606.4p.

The only FTSE firm to fall further was Schroderswhich fell 2,090.05p to 427.95p, although that was only on a technicality after it split each of its shares into five parts, meaning each share fell 80% in value.

The price of Brent oil fell by 1.7% to 90.43 US dollars per barrel. London markets are closed.

The biggest gainers on the FTSE 100 were Lloyds, up 1.2p to 49p, Haleon, up 6.05p to 265.45p, IAG, up 2.36p to 108.34p, Halma, up 35p to 2,035p and Fresnillo up 10.8p to 740.8p. old

Biggest losers in the FTSE 100 were Schroders, down 2,090.05p to 427.95p, Ocado, down 64.6p to 606.4p, Persimmon, down 93p to 1,337p, Barratt Developments, down 24p to 404.8p and Intermediate Capital Group down 66p. to 1146.5 r


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