FTSE 100 sinks into the red despite gains for energy stocks
The FTSE 100 closed 32.5 points lower, or 0.43%, to 7,593.22.
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Your support makes all the difference.The UK’s top stock index languished on Wednesday as meagre gains for energy and mining stocks failed to offset heavier afternoon losses.
The FTSE 100 lost gains from earlier in the day and closed firmly in the red as investors continue to be clouded by concerns over the global economy.
It closed 32.5 points lower, or 0.43%, to 7,593.22.
As we come to the end of the week, the month, and the quarter, there remains a great deal of uncertainty as to what sort of economy we will see in the fourth quarter
There were modest gains for energy giants Shell and BP, and miners Glencore and Rio Tinto, after a North Sea oil field was given the go-ahead by the UK Government’s regulator, the North Sea Transition Authority.
It was met with staunch opposition from environmental campaigners but welcomed by the Government’s energy security secretary.
But the path for interest rates over the rest of the year and into 2024 remains front and centre of investors’ minds, analysts said.
Michael Hewson, chief market analyst for CMC Markets UK, said: “As we come to the end of the week, the month, and the quarter, there remains a great deal of uncertainty as to what sort of economy we will see in the fourth quarter, and whether the determination of central banks to keep rates high will change if we see further deterioration in the economic outlook over the next few months.”
The “penny is dropping” that rates may stay at current levels for longer than thought, with energy prices rising sharply since June, he said.
Elsewhere in Europe, Germany’s Dax fell by 0.25% and France’s Cac 40 dipped by 0.03%.
After a choppy day for the pound, it was around 0.1% lower against the US dollar at 1.2145 by the time European markets closed. Sterling was up 0.4% against the euro to 1.154.
The price of Brent crude oil soared by 2.64% to 96.44 US dollars per barrel.
In company news, shares in Pendragon – which is at the centre of a three-way takeover tussle – leapt higher after the car dealership group posted higher half-year profits.
The company said it has received takeover proposals from AutoNation, Hedin and Penske, and Lithia Motors. It had said last week it had agreed to sell its UK motor and leasing businesses to Lithia for £250 million.
The update on its improved revenues and profits saw its share price jump by 13.2% on Wednesday.
Elsewhere, shares in cruise and insurance company Saga moved lower despite it telling investors it expects to beat market expectations this year with double-digit revenue growth and improved underlying profits.
But the company flagged that its insurance division had been facing a tough inflationary market, with the motor insurance unit weighing on earnings. Its share price was down by 4.9% at close.
The biggest risers on the FTSE 100 were IMI, up 77p to 1,575p, BP, up 7.6p to 538.5p, Shell, up 30p to 2,629p, Hikma Pharmaceuticals, up 13p to 2,093p, and Halma, up 11.5p to 1,916p.
The biggest fallers on the FTSE 100 were Ocado, down 66.6p to 615p, Centrica, down 8.4p to 157.75p, Land Securities, down 26p to 579.2p, Sainsbury’s, down 9.1p to 252.6p, and Unite Group, down 29p to 891p.