London stocks slide as downbeat GDP, hot U.S. inflation data weigh

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A worker shelters from the rain under a Union Flag umbrella as he passes the London Stock Exchange in London, Britain, October 1, 2008. REUTERS/Toby Melville

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  • FTSE 100 down 2.0%, FTSE 250 off 1.6%

May 12 (Reuters) – UK shares dropped on Thursday as risk sentiment took a beating after data showed British economy shrank in March, highlighting the cost-of-living crisis while persistently hot U.S. inflation data exacerbated investor fears of aggressive rate hikes.

The blue-chip FTSE 100 (.FTSE) was down 2%, as of 0705 GMT, with commodity stocks among the worst performers.

Oil majors BP (BP.L) and Shell (SHEL.L) fell 4.4% and 2.8%, respectively, while miners (.FTNMX551020) declined 4.3%, tracking the drop in commodity prices on demand concerns and recession fears.

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The domestically focussed mid-cap index (.FTMC) fell 1.6%.

Britain’s economy shrank by 0.1% in March, but expanded by 0.8% for the first quarter of 2022 as a whole, in what is likely to have been a high point for 2022 as the cost-of-living crisis increasingly bites, according to data on Thursday. read more

Rolls-Royce (RR.L) rose 2.5% as the luxury carmaker traded in line with expectations in the first four months of the year, helped by a gradual return to flying and increased government investment in defence. read more

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Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Sherry Jacob-Phillips

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