The FTSE 100 slipped back below the 7,000 point mark by the market close, despite a strong start to the week’s trading after the Bank Holiday weekend.
The blue-chip FTSE 100 index fell 0.67 per cent by the end of the day, with banking stocks, including HSBC Holdings, Barclays and Standard Chartered posing the biggest drag on the index.
The FTSE 250 of mid-cap firms had a similarly sluggish start to the week, ending the day 0.74 per cent down.
Across the pond, Wall Street’s markets were having a tougher day, as investors moved money out of blue-chip stocks and into those set to benefit from the recovery.
The tech-focused Nasdaq fell some 2.73 per cent by early evening, as steep declines in megacap growth stocks pushed Wall Street below record trading levels, with investors seeking shelter in more defensive parts of the market.
Highly valued technology companies including Microsoft, Alphabet, Apple, Amazon.com and Facebook fell between 2.3 and 4.2 per cent.
All the 11 major S&P 500 sectors were down, with technology , communication services and consumer discretionary falling more than 2 per cent each.
The Dow Jones Industrial Average was down 235.73 points, or 0.69 per cent, at 33,877.50, the S&P 500 was down 56.17 points, or 1.34 per cent.
After an hour of trading, the FTSE 100 was outperforming the French CAC, which is down 0.2 per cent, and the DAX, which fell 1.4 per cent.
The German index’s losses were down to a fresh crisis over semiconductor chips, said Spreadex’s Conor Campbell:
“Chip shortages have caused car production lines around the world to shudder to a halt, with the industry at the back of the queue behind tech firms and games console manufacturers after reducing orders at the start of the pandemic.
“The issue has been put under renewed scrutiny in the last 24 hours, first by Intel chief Pat Gelsinger stating the shortages would persist for ‘a couple of years’, and then by German firm Infineon stating that production would lag by 1m units in Q2.”
Markets were also helped by higher by new data that suggested that the UK’s manufacturing sector had grown at its fastest rate since 1994 despite Brexit and the pandemic.
The pound is also down 0.2 per cent against the dollar, further helping equities.
Backed up by the talk of a commodities supercycle, the FTSE’s big mining and commodities beasts led the way this morning.
Miner Fresnillo was the FTSE 100’s biggest mover this morning, up 4.9 per cent. With oil prices up nearly 2.0 per cent, Shell and BP rose 2.7 and 2.1 per cent each.
Further back, BHP, Glencore, Rio Tinto and Polymetal were all up between 2.0 and 4.0 per cent.
It was also a good day for the FTSE’s airlines, following yesterday’s announcement from the EU that it would start welcoming back vaccinated tourists this summer.
On the FTSE 100, British Airways owner IAG, which climbed 2.4 per cent. On the FTSE 250, holiday giant Tui led the charge, up 5.0 per cent, with budget carrier Easyjet up 3.5 per cent.
On the other hand, it was a slower start for HSBC, JustEast Takeway and Ocado, which are all down over 1.0 per cent so far today.