London’s FTSE 100 kicked off a new week in subdued style today, dragged lower by big industrial firms extending last week’s poor performance.
The capital’s premier index slipped 0.02 per cent to 7,912.20 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, shed 0.22 per cent to close at 19,226.94 points.
Shares of big mining and oil companies fell sharply in the City today, building on losses they racked up last week fuelled by investors sweating over whether central banks could knock the global economy by hiking interest rates too aggressively to tame inflation.
Downward price movements extended into the new week, with miner Glencore initially leading loses by falling 1.7 per cent, before regaining some ground. Fresnillo tumbled 1.6 per cent while Antofagasta dipped nearly one per cent.
Oil mega caps BP and Shell followed closely behind during early exchanges, skidding around 1.4 per cent lower each. The former eventually finished in the black while Shell just about notched losses.
The FTSE 100 has benefited from having a massive gearing toward so-called “old economy” stocks like miners, oil producers and commodity suppliers due to the huge surge in raw material prices over the past year or so.
“Weak iron ore prices, which have slipped to their lowest levels this year, are acting as a dead weight on the likes of Glencore and Anglo-American,” Michael Hewson, chief market analyst at CMC Markets UK, said.
“BP and Shell were initially acting as a drag, however a rebound in oil prices has managed to pull the FTSE100 off its lows, and into positive territory,” he added.
Pound sterling gained around 0.35 per cent on the US dollar.
Credit Suisse posted what is likely to be its final ever set of results this morning after it was pawned off to its biggest rival UBS by Swiss regulators to avert its failures contaminating the wider European banking sector.
It said it had suffered around £55bn of outflows in the first three months of the year, pushing the bank toward the edge of the cliff. Its shares closed down around 0.6 per cent.