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MARKET WRAP: FTSE tumbles, crude slips, Bitcoin drops below $40K

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Key Points

FTSE 100 closing price of 7,493.2 (-1.2%)
European stocks slip; FTSE 2022 gains wiped out
Playtech shares plunge after bidder pulls out
UK retail sales fall on Omicron hit, GBP weak
Crude edges lower after recent gains
Bitcoin plunges below $40K to multi-month low

By Samuel Indyk – The FTSE 100 tumbled 1.2% on Friday to end the week on a sour note as stocks in Europe declined. The weakness comes after US stocks plunged on Thursday, although have shown some signs of stabilising on Friday. The FTSE 100 has almost wiped out all the gains seen since the start of the year.

Playtech (LON:PTEC) shares fell over 20% after JKO Play announced they would not be making a bid for the gambling company. JKO had initially planned to offer 750 pence per share for Playtech but the FT reported that the decision to pull out of a deal was due to concerns that a group of investors that recently bought into the company would block the deal.

UK retail sales showed a sharper-than-expected decline in December as the Omicron variant caused havoc on footfall. Sales volumes declined 3.7% MoM which was the largest monthly drop since January. The news comes as the UK Prime Minister Johnson announced an easing of the “Plan B” restrictions that have been in place since the discovery of Omicron.

“Even as plan B restrictions lift, the number of shoppers is unlikely to snap back to pre-pandemic times in high streets and city centre locations given that hybrid working is fast becoming the norm and household budgets are tightening,” Hargreaves Lansdown (LON:HRGV) Senior Investment and Markets Analyst Susannah Streeter said. “Already two-thirds of adults are reporting the cost of living has increased over the past four weeks, and with more energy price rises on the way there are likely to be far fewer shoppers merrily splashing the cash in the months to come.”

GBP was weak following the data with GBP/USD dropping below 1.3600 and EUR/GBP back above 0.8350.

WTI and Brent crude futures both edged lower although remain near multi-year highs as the supply picture looks set to tighten further in the coming months. The recent rally in crude hit a speed bump on Thursday after the delayed weekly inventory data from the Energy Information Administration. The data showed the first increase in crude oil stockpiles since November.

Major cryptocurrencies were very weak after Bitcoin dropped below $40,000 for the first time since 10th January and to its lowest level since August last year. The whole cryptocurrency sector was affected by the risk aversion with Ethereum, Cardano, Solana, and XRP all lower by over 10%.


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MARKET WRAP: FTSE tumbles, crude slips, Bitcoin drops below $40K

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