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HomeinvestingUK-Listed Stocks Open Lower as Commodities Prices Fall and Boohoo's Shares Slump

UK-Listed Stocks Open Lower as Commodities Prices Fall and Boohoo’s Shares Slump

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UK Stocks Open Lower as Energy and Mining Companies Weighed Down by Falling Commodity Prices

UK-listed stocks opened lower on Tuesday, with energy and mining companies leading the decline as prices of most commodities fell due to a stronger dollar. Boohoo, the online fashion retailer, also saw its shares slump after announcing a decline in annual revenue.

The dollar reached fresh 11-month highs against major peers following the U.S. government’s avoidance of a partial shutdown. Additionally, manufacturing data fueled expectations that the Federal Reserve would maintain higher interest rates for a longer period.

Boohoo’s shares dropped 10% as the company reported a 17% decline in revenue for the six months leading up to August. The fashion retailer also warned of a similar decline for the full year, citing a slower-than-expected recovery in sales volumes.

The FTSE 100, which consists of internationally focused companies, lost 0.1% by 0702 GMT, while the more domestically focused FTSE 250 was down by 0.5%.

In other economic news, the latest data revealed that prices in British store chains rose at the slowest pace in a year in September. This suggests that the UK’s inflation rate will continue to ease.

The decline in UK-listed stocks can be attributed to the stronger dollar, which has led to falling commodity prices. Energy and mining companies, particularly sensitive to commodity price fluctuations, experienced the most significant declines. Boohoo’s disappointing revenue figures also contributed to the overall negative sentiment in the market.

Investors are closely monitoring the impact of the stronger dollar on commodity prices, as this could affect the profitability of energy and mining companies in the UK. Additionally, Boohoo’s warnings of a decline in revenue raise concerns about the pace of recovery in the fashion retail sector.

The FTSE 100, which includes many internationally focused companies, is particularly vulnerable to changes in global economic conditions. The index is influenced by factors such as currency fluctuations, commodity prices, and global trade tensions.

Meanwhile, the FTSE 250, which consists of more domestically focused businesses, also experienced a decline. This suggests that concerns about the UK economy are not limited to international factors, but also include issues specific to the domestic market.

Inflation data further adds to the economic outlook for the UK. The slower rise in prices at British store chains indicates that inflation is easing. This could have implications for monetary policy decisions, as the Bank of England closely monitors inflation when determining interest rates.

Overall, the opening of the UK stock market was marked by a downward trend, driven by factors such as the stronger dollar, falling commodity prices, and disappointing revenue figures from Boohoo. The market will continue to react to both international and domestic developments, as well as economic data, which will shape investor sentiment in the coming days and weeks.

More detail via Reuters here… ( Image via Reuters )

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