The FTSE 100 fell sharply on Tuesday, weighed down by weak oil stocks and Asia-focused financials, as well as fresh losses in US tech shares. The FTSE 250 ended down 175.47 points, or 0.8%, at 22,837.96, while the Aim All-Share fell 12.78 points, or 1.6%, to 780.81.
Oil prices declined after US President Donald Trump said negotiations over a peace deal to end the Middle East war were in their final stages, with a deal possible in “two or three days”. Brent crude for August delivery traded lower at $90.90 a barrel on Tuesday, down from $94.75 at the time of the London equities close on Monday. Reflecting the lower oil price, shares in BP and Shell fell 3.0% and 1.9% respectively.
Weighing on London’s blue-chip index, Asia-focused financials suffered losses, with Standard Chartered, HSBC and Prudential down 6.3%, 4.4% and 4.2% respectively. The renewed weakness came amid fresh worries about the impact of China’s new regulations on outbound direct investment. JPMorgan said the changes could disrupt existing wealth and personal banking business.
In corporate news, BP announced plans to focus on two distinct business segments, “upstream and downstream”, replacing the current three-tier structure. BP chief executive officer Meg O’Neill said: “Focusing BP around two distinct segments is an important step in accelerating delivery.”
European markets were mixed, with the Cac 40 in Paris ending up 0.1%, while the Dax 40 in Frankfurt closed 0.7% lower. In New York, the Dow Jones Industrial Average was down 0.6%, the S&P 500 fell 1.1%, and the Nasdaq Composite dropped 1.9%.
Investors are now looking ahead to US inflation data due Wednesday, which is expected to show the headline rate topping 4% year-on-year in May. The pound traded at $1.3381 on Tuesday afternoon, up from $1.3339 on Monday, while against the euro, sterling firmed to €1.1581 from €1.1561.
