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Today's markets: Bitcoin battered, UK inflation jumps, stocks slide

Follow our Markets Live blog for the latest news that affects your investments
May 19, 2021

Good morning and welcome to the IC’s live blog, where we round up the biggest business stories of the day and international overnight news.

Bitcoin drops on China action

The price of bitcoin has dropped below $40,000 for the first time since February, after news rolled in that China had intensified its efforts to suppress the surge in digital currency trading.

China has banned financial institutions from providing services related to cryptocurrency transactions, with authorities warning that digital currencies should not be used in financial markets or the real economy as money.

It’s been a tough few days for bitcoin. Even self-anointed ‘technoking’ Elon Musk has raised concerns about the cryptocurrency. The Tesla (US:TSLA) chief executive tweeted last week that his company had suspended vehicle purchases using bitcoin, amid rapidly increasing usage of fossil fuels for bitcoin ‘mining’ and transactions. Cryptocurrency’s “promising future” could not “come at great cost to the environment”, he said.

Shell, BP and climate resolutions

Turning to the UK – and to more traditional asset classes – almost a third of Royal Dutch Shell (RDSB) shareholders have supported a special resolution brought by Dutch activist group Follow This pertaining to tougher climate action. The same resolution at BP’s (BP.) AGM last week met a 21 per cent positive vote.

In the retail world, shares in Dunelm (DNLM) shot up 7 per cent at the open on Wednesday after the group said full-year profits would be “significantly ahead” of analysts’ expectations. Sales growth has been “very strong” since most stores reopened in mid-April, but the group has also benefited from digital momentum.

As experienced by companies including FTSE 100 giant Next (NXT), the Covid-19 pandemic has accelerated pre-existing trends away from in-person shopping and towards the e-commerce realm, though there are questions about how far online retail will sustain as restrictions ease.

Inflation rate spikes

And on the subject of spending, the UK’s inflation rate rose by 1.5 per cent in the 12 months to April 2021, new data from the Office for National Statistics (ONS) showed this morning, more than double the growth rate of 0.7 per cent to March.

Rising household utility, clothing and fuel prices made the biggest upwards contributions to inflation growth – partly tempered by downward inputs from recreation and culture.

You can find our analysis of today’s developments in the live blog below. HC and MM