Britain’s FTSE 100 benchmark is braced for its worst day in a month after dipping this morning following dramatic political developments on both sides of the Atlantic yesterday.
The blue-chip index opened 0.5 per cent down before sliding further to almost 0.9 per cent, with investors fearing news of an official impeachment inquiry into president Trump would further unsettle an already fragile global economy.
Heading for biggest drop in a month
If the losses hold, the index is heading for its biggest one-day fall since August.
Fallout from yesterday’s Supreme Court ruling that prime minister Boris Johnson’s prorogation of Parliament was unlawful continued, with investors focused on the future of Brexit. The House of Commons is set to reconvene later today.
“Calls for resignation grow. But nothing has really changed. The only narrative that counts is that there’s elite out there frustrating Brexit at every turn,” said Markets.com analyst Neil Wilson.
Top five fallers
- TUI: -5.88% (903.2p)
- Halma: -3.55% (1,902.25p)
- NMC Health: -3.30% (2,638p)
- Ocado Group: -3.25% (1,297p)
- Schroders: -2.75% (2,935.5p)
Although Sterling dipped after yesterday’s gains following the Supreme Court’s ruling, the FTSE 100 still struggled to make gains.
The index was also hurt by a sharp drop in the oil price. Brent crude fell 1.1 per cent, dragging down FTSE 100 heavyweight Royal Dutch Shell by 0.3 per cent.
Shares in travel operator TUI slid this morning after two days of steady climbs in the wake of the news that rival Thomas Cook had gone into liquidation.
Top five risers
- Sainsbury: +1.41% (216p)
- Polymetal International: +1.12% (1,172.25p)
- Morrison Supermarkets: +0.73% (200.35p)
- Reckitt Benckiser Group: +0.55% (6,395p)
- Astrazeneca: +0.36% (7,268.5p)
Sainsbury’s was the FTSE 100’s best performer after setting out new cost cutting plans this morning. The supermarket chain is planning to overhaul its store estate, opening a swathe of smaller stores but closing some others.
‘Just a bit too much going on’
Global markets have also dipped on worries of greater political uncertainty. In the US, news of the impeachment proceedings took a toll. The S&P500 and the DOW both closed down, at -0.84 per cent and -0.53 per cent respectively.
Trump’s statement at the UN that he would not accept a “bad deal” with China also dampened sentiment related to the trade war. AJ Bell investment director Russ Mould said the comments “ has caused investors to become less hopeful about an amicable resolution”.
Japan’s Nikkei 225 slid 0.36 per cent, while Hong Kong’s Hang Seng was down 1.28 per cent.
In Europe, France’s CAC 40 fell 1.53 per cent this morning, while the DAX dropped 1.17 per cent.
Spreadex’s Connor Campbell has perhaps the neatest summary of investor sentiment this morning, writing: “There’s just a bit TOO much going on at the moments for the markets”.
Main image credit: Getty