London’s FTSE 100 index dipped on Wednesday as the pound continued its losses, and the government approved the UK’s largest untapped oil field, Rosebank.
The capital’s premier bluechip index dipped 0.46 per cent to 7,590.96, while the FTSE 250, which is more aligned with the UK domestic market, fell 0.6 per cent to 18,227.33.
Markets were perturbed by by a mixture of factors, including European markets having a tough day yesterday, and the US also slipping back slightly.
A year on from Liz Truss’ mini-budget chaos, the pound continued its slide against the dollar, sitting at $1.21, after having fallen to a six month low.
This morning, the UK’s largest untapped oil field, Rosebank, was given the green light by the government, in another signal the government is backing continued investment in fossil fuels.
The project will go ahead after private investors and government both signalled final approval, with Prime Minister Rishi Sunak throwing his weight behind it also.
Equinor and Ithaca Energy will invest around £3bn in the project which was finally given government go-ahead this morning.
Following the news, Ithaca’s shares on the FTSE 250 rose more than eight per cent after the open, finishing at around that by the close also.
Close Brothers’ shares were also up more than six per cent,
The biggest faller on the FTSE 100 after the open was Ocado, which was down almost 10 per cent by thge close.
British Gas owner Centrica was a;sp down more than five per cent, after it received a rare sell recommendation from the city yesterday.
“The FTSE 100 was pretty much unchanged early on Wednesday but there’s no doubt an air of uneasiness continues to pervade the markets, visible in the recent surge in the VIX index of volatility,” said AJ Bell investment director Russ Mould.
“The looming threat of a government shutdown in the US, a weak consumer confidence reading overnight and continued industrial action by the country’s auto workers are creating a mood of instability which, when added to the strong hints that rates will stay elevated for an extended period, is not a happy cocktail for stocks.
“After rowing back on net zero targets the government will have done little to endear itself to environmentalists this morning, though it may be winning the energy industry back on side, as it approves a major North Sea oil development.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “There may be a small pause for breath on Wall Street after the steepest sell off since March, but sentiment is unlikely to improve markedly signs of deteriorating confidence, while inflation remains off target.
“This week’s data points to weakening optimism about economic prospects, with new home sales in August falling 8.7%, a bigger drop than expected. The Conference Board’s Consumer Confidence Index also marked up a bigger fall in sentiment than expected. The unfortunate collision of disappointing data and stubborn inflation is causing a bout of anxiety which doesn’t look easy to calm. 10-year US Treasury yields have been pushed to the highest levels since 2007 as investors assess the prospects that interest rates will be forced to stay higher for longer, with fewer cuts anticipated next year.”
Meanwhile, owner of Betfair and Paddy Power, Flutter, announced it had bought a 51 per cent stake in Serbia’s MaxBet for €141m (£123m), as its shares rose marginally.
Elsewhere, cinema group Everyman reported a pre-tax loss of £4.3 million in the first half of the year, as the struggling chain said the recent Oppenheimer phenomenon had boosted its sales.