Pound slide continues as energy and oil firms weigh on FTSE
The FTSE 100 ended the day down 74.48 points, or 1.05%, at 7,284.15 amid pressure from energy suppliers and producers.
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Your support makes all the difference.The pound drifted further to finish August with its worst month since 2016 amid continued worries over the UK’s economic prospects.
Weakness in the pound – following predictions by Goldman Sachs that a UK recession could continue into 2024 – did not provide respite for the FTSE 100, which fell to its lowest in over a month.
The pound was down 0.12% against the dollar at 1.164 and was 0.53% lower against the euro at 1.156 at the close.
The FTSE 100 ended the day down 74.48 points, or 1.05%, at 7,284.15 amid pressure from energy suppliers and producers.
Michael Hewson, chief market analyst at CMC Markets UK, said: “It’s been another disappointing day for the FTSE, with a slide in energy prices weighing on the likes of BP and Shell, with both crude oil and natural gas prices sliding for the second day in succession.
“Up until the end of last week the FTSE 100 had been on course for a positive month, however the last three days, and the hawkish tone from Jerome Powell’s Jackson Hole speech, has seen the rug pulled out from underneath the positive mood.
“We’re also seeing declines in the likes of National Grid, SSE and Centrica as concerns about a windfall tax on some of their profits resurfaces.”
Elsewhere in Europe, the other main markets were also lower as the European Central Bank prepares for a major rate hike.
The German Dax declined 0.97% by the end of the session and the French Cac finished 1.37% lower.
Across the Atlantic, the Dow Jones opened modestly higher despite the latest ADP jobs report highlighting an unexpectedly low increase in jobs numbers.
In company news, Anglo American dipped after an increase in rough diamond sales failed to offset warnings that the temporary closure of polishing factories for the Diwali holidays might hurt sales in the next few cycles.
Shares fell by 3.5p to 2,783p as the mining firm lost early gains from the start of the session.
Cake Box saw shares plummet after it warned profits for the year are set to be “significantly below current market expectations” due to surging costs and weaker sales.
The cream cake retailer said the trading environment has become “significantly more challenging” over the past two months and resulted in a recent sales decline.
Shares in Cake Box, therefore, dropped by 53.5p to 125.5p at the close of trading.
Cineworld finished the day higher after the troubled cinema chain sought to clarify its largest shareholder following reports by the Financial Times that this had been recorded incorrectly in its annual report for the past year. Shares moved 1.042p higher to 3.4p.
The price of oil came under pressure after another set of Chinese economic numbers that pointed to a weak economy.
Brent crude oil dropped by 2.69% to 96.64 US dollars per barrel when the London markets closed.
The biggest risers in the FTSE 100 were IAG, up 1.84p at 108.22p, Flutter Entertainment, up 170p at 10,765p, Endeavour Mining, up 24p at 1,683p, Imperial Brands, up 18.5p at 1,896.5p, and Phoenix, up 5p at 602.4p.
The biggest fallers of the day were Glencore, down 10.65p at 473.3p, Hargreaves Lansdown, down 19.2p at 817.6p, AstraZeneca, down 326p at 10,644p, SSE, down 58.5p at 1,652.5p, and National Grid, down 46.5p at 1,078p.