The FTSE 100 and European markets lost steam on Monday in London following a week of gains, as fresh data suggested trouble for the UK's manufacturing sector and markets await several central bank meetings.
The FTSE 250 (^FTMC), which tracks more domestically-linked stocks, fell 1.7%.
Key decisions are expected by the Bank of England, the US Federal Reserve and the Bank of Japan later this week, as traders hold their breath to see how major economies will continue to fight the effects of inflation.
Meanwhile, fresh data shows that manufacturers have been stalling investment and cutting hiring plans due to the economic environment in Britain.
The majority of Britain's manufacturers think policy incentives in other major economies are making UK investments harder to justify, according to a new survey by industry body Make UK.
Of the companies surveyed, 72.7% said they felt measures such as the US Inflation Reduction Act and similar European measures had created a challenging investment environment.
More than half of companies have withheld investment in the last two years as a result of the uncertain business environment, despite having investment capital accessible, the survey found.
Stay with us for live updates throughout the day:
Chris Beauchamp of IG is putting the wobbly day in equities down to oil price worries:
Everyone is worried about oil prices, and what they will mean for inflation figures heading into the end of the year. While the recent pickup in US price growth is unlikely to shift the Fed into hiking on Wednesday, another hike before year-end seems more plausible.
Here are our trending tickers for the day.
Bitcoin headed around 2.6% higher on Monday morning in London, heading past $27,000 (£21,780) as traders await decisions from central banks around the world on key interest rates.
The Bank of England, the Federal Reserve and the Bank of Japan are all set to update markets on their rate paths later this week. Bitcoin's price is typically sensitive to macroeconomic movements such as interest rate rises and inflation readings.
The cryptocurrency's price has also been sensitive to news coming out of the FTX bankruptcy hearings, as a judge approved the sale of some of its assets. Its portfolio includes $560m of Bitcoin (BTC) and $192m worth of Ethereum (ETH-USD).
Oil prices maintained their highest point since November on Monday, with Brent crude (BZ=F) at over $94 a barrel.
The moves came off the back of optimism following stimulus packages from China. Traders are hoping the fresh round of support will help revitalise the economy in the oil-hungry nation.
Prices have also been supported by production cuts from key oil-producing nations in recent weeks, as OPEC+ opted to sustain output caps.
UK rents are up 12%, rising at the fastest pace in nine years, new data shows.
Read our take here.
Rate hikes and dot plots
Here's Neil Wilson, chief market analyst at Finalto, on the upcoming Fed meeting, which he says is certain to result in a pause in rate hikes:
The main question overhanging the meeting is on the dot plot. With the latest round of economic projections due we will see whether policymakers still see one more hike this year. If the dots are the same as June, markets could move to price in a higher likelihood the Fed hikes in November and push back on when the Fed starts to cut. If the median dot is lower than the 5.6% forecast in June, then it could be the signal to the market that the Fed is done, with the current target rate at 5.25-5.50%. This may be taken as a dovish signal so Powell would need to sound hawkish in the presser to counter.
FTSE top risers and fallers
Here's how individual stocks in the FTSE 100 have started the week as of 9.05am:
Mondi ☝️ 4.9%
Ocado ☝️ 4.1%
Ashtead ☝️ 1.5%
Phoenix Holdings ☝️ 0.8%
Persimmon 👇 2.1%
WPP 👇 1.8%
CRH 👇 1.4%
Johnson Matthey 👇 1.4%
Meanwhile, rent inflation hits the UK
New data shows that rents were up 12% in August compared with a year ago, as landlords react to increasing pressure from high interest rates.
The data from Hamptons showed that the average rent in Britain is now £1,300 -- the highest on record.
It was the most rapid level of increase since Hamptons begun publishing the data and will give the Bank of England pause for thought on its nexts moves to try to tame inflation.
Overnight in Asia
Markets were mixed at the close in Asia on Monday as traders gear up for a week packed with central bank updates.
Policy meetings are slated this week from the Federal Reserve and the Bank of Japan, among others.
The property sector weighed on Hong Kong's Hang Seng (^HSI) which finished 1% lower. Shares in the beleaguered Evergrande dipped as much as 25% before regaining ground. Staff of the property developer were detained at the company's wealth management unit.