Market Analysis

The UK's primary stock index reached a three-week low on Wednesday, experiencing a broad-based decline as concerns over the U.S. economic outlook weighed on market sentiment ahead of several central bank monetary policy decisions later this month.

The FTSE 100, comprising blue-chip stocks, dropped by 0.7% as of 0715 GMT, following its steepest single-day decline in two weeks on Tuesday. Meanwhile, the domestically-oriented mid-cap FTSE 250 index fell by 0.9%, marking its largest drop in nearly a month.

Among the worst-performing sectors were medical equipment and household goods, which declined by 2.1% and 1.4%, respectively.

Investor confidence was shaken on Tuesday after weak U.S. manufacturing data revived concerns about the health of the world's largest economy. These fears had already triggered a global stock market sell-off in early August and intensified expectations for a Federal Reserve interest rate cut this month.

As U.S. futures continued to decline following a sharp sell-off on Wall Street overnight, Europe's STOXX 600 index also fell by 1% during the day.

Historically, September has been a challenging month for markets, but multiple factors could influence performance in the coming weeks. With a U.S. rate cut for September nearly fully priced in, investors are now seeking signals to determine the extent of the anticipated cut.

Key data points for the day include U.S. job openings, euro-zone producer prices, and the UK's Purchasing Managers' Index, with upcoming rate decisions from the European Central Bank and the Bank of England also in focus.

Direct Line Insurance Group dropped 2.3% after reporting lower-than-expected half-year operating profit, while homebuilder Barratt Developments fell 1.2% following the release of its annual results.

Airtel Africa plummeted nearly 6.4%, the biggest decline in the FTSE 100, after JP Morgan downgraded the stock from "Overweight" to "Neutral."

Insurer and asset manager M&G also saw a 1.2% drop following a decrease in first-half operating profit.

Paraphrasing text from "Reuters" all rights reserved by the original author.