(Sharecast News) - London stocks fell in early trade on Monday amid expectations of more aggressive rate hikes by the US Federal Reserve, and as investors looked ahead to the start of the second-quarter US earnings season.
At 0835 BST, the FTSE 100 was down 1% at 7,127.50.

Richard Hunter, head of markets at Interactive Investor, said the better-than-expected payrolls report on Friday indicated underlying resilience in the US economy but also means the Fed will likely hike rates by another 75 basis points at its upcoming meeting.

"Attention now switches to another inflation reading later in the week, and also the beginning of the quarterly earnings season, opened by banks such as JP Morgan and Citigroup on Thursday and Friday. Expectations are low for earnings generally, and outlook comments from companies will receive particular scrutiny," he said.

"Asian markets were in less sanguine form, with the announcement of fines on the likes of Tencent and Alibaba by China due to those companies failing to comply with anti-monopoly rules on transaction disclosures. The latest spike in Coronavirus cases is also spooking investors, with data due later in the week likely to confirm a sharp contraction in the Chinese economy following a number of lockdowns over the past few months.

"The sombre mood also spilled over to the UK in early exchanges, as investors searched in vain for reasons to be immediately cheerful. With a number of economic and corporate releases due later in the week, ranging from retail sales to GDP, the expectation remains for the tightening of interest rates to continue amid high inflation and an increasingly evident cost of living crisis."

In equity markets, miners were under the cosh as China reimposed Covid curbs, with Anglo American, Antofagasta, Glencore, and Rio Tinto all lower.

BA and Iberia parent IAG was trading down amid ongoing travel chaos, with budget airlines Wizz and easyJet also on the back foot.

Wizz said on Monday that it was cutting its summer capacity by 5% due to staff shortages, as it reported a €285m operating loss for the first quarter. However, the airline also said it was expecting a "material" operational profit in the second quarter as revenue and pricing momentum continue to improve.

Other travel-related shares also fell, with Carnival, Tui and SPP all weaker.

Market Movers

FTSE 100 (UKX) 7,127.50 -0.96%
FTSE 250 (MCX) 18,775.25 -0.73%
techMARK (TASX) 4,327.75 -0.34%

FTSE 100 - Risers

Reckitt Benckiser Group (RKT) 6,290.00p 0.70%
SSE (SSE) 1,703.50p 0.59%
Severn Trent (SVT) 2,747.00p 0.37%
National Grid (NG.) 1,072.00p 0.33%
Relx plc (REL) 2,249.00p 0.31%
Unilever (ULVR) 3,844.00p 0.21%
Diageo (DGE) 3,542.50p 0.14%
BAE Systems (BA.) 810.80p 0.12%
United Utilities Group (UU.) 1,014.00p 0.10%
Coca-Cola HBC AG (CDI) (CCH) 1,848.00p 0.08%

FTSE 100 - Fallers

Antofagasta (ANTO) 1,058.00p -4.94%
Anglo American (AAL) 2,691.00p -4.73%
Smurfit Kappa Group (CDI) (SKG) 2,691.00p -3.41%
Glencore (GLEN) 418.10p -3.07%
Abrdn (ABDN) 159.15p -2.78%
International Consolidated Airlines Group SA (CDI) (IAG) 107.06p -2.78%
Fresnillo (FRES) 664.60p -2.72%
WPP (WPP) 780.20p -2.55%
Entain (ENT) 1,069.50p -2.51%
Smith (DS) (SMDS) 278.30p -2.35%

FTSE 250 - Risers

IP Group (IPO) 72.80p 1.61%
Micro Focus International (MCRO) 287.00p 1.41%
JTC (JTC) 632.00p 1.28%
Tullow Oil (TLW) 44.38p 1.09%
Sequoia Economic Infrastructure Income Fund Limited (SEQI) 88.20p 0.92%
FDM Group (Holdings) (FDM) 887.00p 0.91%
Computacenter (CCC) 2,438.00p 0.83%
Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 305.00p 0.83%
Syncona Limited NPV (SYNC) 199.60p 0.81%
Telecom Plus (TEP) 2,035.00p 0.74%

FTSE 250 - Fallers

Wizz Air Holdings (WIZZ) 1,767.50p -4.90%
Carnival (CCL) 660.20p -4.32%
Aston Martin Lagonda Global Holdings (AML) 451.50p -4.20%
Ferrexpo (FXPO) 115.90p -3.74%
TUI AG Reg Shs (DI) (TUI) 131.65p -3.45%
SSP Group (SSPG) 230.20p -3.28%
easyJet (EZJ) 364.20p -3.24%
Synthomer (SYNT) 227.40p -3.23%
Watches of Switzerland Group (WOSG) 736.00p -3.16%
Bridgepoint Group (Reg S) (BPT) 211.80p -3.11%