# Cyclicals, BAT drag FTSE 100 lower ahead of Fed decision Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-11-03 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: FTSE 100 Index Slips as Investors Await US Federal Reserve Meta Description: FTSE 100 fell 0.6% as investors awaited the U.S. Federal Reserve's monetary policy call. British American Tobacco Plc slid 5.5% after downgrade. URL: https://financedigest.com/cyclicals-bat-drag-ftse-100-lower-ahead-of-fed-decisionhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-11-02t100243z1lynxmpeia10curtroptp4britain-eu-markets-1736814928140-compressed.jpg) By Johann M Cherian and Sruthi Shankar (Reuters) – UK’s FTSE 100 index slipped on Wednesday, weighed down by cyclical sectors and shares of British American Tobacco, as investors awaited a key U.S. Federal Reserve monetary [policy decision](https://www.financedigest.com/asian-shares-rise-dollar-dips-ahead-of-fed-policy-decision.html "Asian shares rise, dollar dips ahead of Fed policy decision"). The blue-chip FTSE 100 [closed down 0.6% after touching](https://www.financedigest.com/touch-screen-display-market-projected-to-close-on-us-121-1-bn-by-2027-covid19-impact-and-global-analysis-by-tmr.html "Touch Screen Display Market Projected to Close on US$ 121.1 Bn by 2027 – COVID19 Impact and Global Analysis by TMR") a near six-week high in the previous session. British American Tobacco Plc [tumbled 5.5% to the bottom of the index after Goldman Sachs downgraded the stock](https://www.financedigest.com/stocks-tumble-dollar-rallies-as-soaring-u-s-inflation-implies-an-aggressive-fed.html "Stocks tumble, dollar rallies as soaring U.S. inflation implies an aggressive Fed") to “neutral. Economically sensitive sectors such as miners, [oil & gas and chemicals fell between 0.8% and 2.5% as the market braced for a big](https://www.financedigest.com/big-oil-doubles-profits-in-blockbuster-2022.html "Big Oil doubles profits in blockbuster 2022") U.S. interest rate [rise later in the day that will stifle economic](https://www.financedigest.com/euro-zone-economic-sentiment-rises-in-january-to-seven-month-high.html "Euro zone economic sentiment rises in January to seven-month high") activity. The [Bank of England is also expected to tighten rates](https://www.financedigest.com/bank-of-england-officials-split-over-future-path-for-rates.html "Bank of England officials split over future path for rates") by 75 basis points on Thursday. They have their own reasons for [raising rates](https://www.financedigest.com/bank-of-england-raises-rates-to-3-5-says-inflation-has-peaked.html "Bank of England raises rates to 3.5%, says inflation has peaked"), but are both facing the same issue – inflation,” said Raed Alkhedr, chief market analyst at Equiti Capital. It is after a certain level that interest [rate hikes](https://www.financedigest.com/uk-economys-unexpected-bounce-spurs-more-boe-rate-hike-talk.html "UK economy’s unexpected bounce spurs more BoE rate hike talk") start hitting company results. I think that during the first quarter of the coming year, a [recession will be so clear such that we are going to start feeling](https://www.financedigest.com/consumer-durables-sector-still-feeling-the-effects-of-recession.html "Consumer durables sector still feeling the effects of recession") the impact on results. Third-quarter earnings for FTSE 100 companies have so far painted a mixed picture, as some [firms performed better than expected as COVID restrictions eased globally](https://www.financedigest.com/sp-global-acquires-firm-to-bolster-capability-to-track-commodity-shipments.html "S&P Global acquires firm to bolster capability to track commodity shipments"), while some battled supply chain snags and surging inflation. We look for defensive companies that have strong [balance sheets](https://www.financedigest.com/ecbs-villeroy-lays-out-plan-for-shrinking-balance-sheet.html "ECB’s Villeroy lays out plan for shrinking balance sheet") and have historically shown reliable, recurring revenues throughout economic downturns,” said Adam Avigdori and Oliver Dixon, portfolio managers at BlackRock. Some of these companies can be found in the [healthcare sector](https://www.financedigest.com/installing-trust-what-intelligent-automation-can-do-for-the-healthcare-sector.html "Installing trust: What Intelligent Automation can do for the healthcare sector"), primarily pharmaceuticals. The mid-cap FTSE 250 rose 0.1%, [lifted by Lloyd’s of London insurer Hiscox after it posted a 6.3% rise](https://www.financedigest.com/sterling-rises-as-receding-bank-sector-worries-lift-sentiment.html "Sterling rises as receding bank sector worries lift sentiment") in gross premiums written. Aston Martin slumped 15.3% after the luxury carmaker cut its annual deliveries and margin forecasts, blaming global [supply chain issues](https://www.financedigest.com/uks-j-d-wetherspoon-returns-to-profit-as-supply-issues-ease.html "UK’s J D Wetherspoon returns to profit as supply issues ease"). [Next Plc rose 1.6% after the clothing](https://www.financedigest.com/britains-next-sees-lower-clothing-inflation-shares-dip-on-cautious-outlook.html "Britain’s Next sees lower clothing inflation, shares dip on cautious outlook") retailer stuck to its earlier guidance. (Reporting by Johann M Cherian in Bengaluru; Editing by Dhanya Ann Thoppil and Shailesh Kuber) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---