FTSE 100 close: Shell and BP drag London index below European rivals
London’s FTSE 100 was left behind by its European rivals today after it was driven lower by big oil megacaps taking a tumble and recession concerns returning to bite.
The capital’s premier index fell 0.35 per cent to 7,757.37 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, jumped 0.34 per cent to 19,869.34 points.
The FTSE 100’s losses put it at the back of the pile in European trading today. The pan-European Stoxx 600 dropped 0.20 per cent, while Germany’s Dax was pretty much flat. France’s CAC 40 jumped around a fifth of a percentage point.
“Stocks across Europe edged higher on Tuesday though the FTSE 100 was left behind,” Neil Wilson, chief market analyst at Finalto, said.
FTSE 100’s losses gathered pace at the open
BP and Shell shed around one per cent today and were trading at close to the bottom of the FTSE 100.
The pair represent a big share of the index, meaning movements in their share prices exert a strong influence on the direction of the FTSE 100.
Sentiment in London was also knocked by weaker than expected data on the health of the UK economy.
The latest purchasing managers’ index (PMI) from S&P Global found the services industry is now shrinking at the fastest rate in two years. The reading fell to 48 from 49.9, far below the 50 point threshold that separates growth and contraction.
Manufacturing activity was better than expected.
But European PMIs were better than Britain’s. Germany’s services survey rose above the boom-bust threshold, as did France’s manufacturing data.
That shock print put downward pressure on the pound, which weakened nearly 0.3 per cent against the US dollar.
Investors tend to sell a currency if borrowing rises sharply.