London stocks dip as high oil prices fuel inflation worries

Stock Exchange

London shares remained near one-month lows on Thursday as oil prices persisted in exacerbating inflation concerns during a week filled with economic data, while energy stocks contributed to mitigating losses.

The blue-chip FTSE 100 index fell 0.4% to 10,627.80 points by 0946, while the midcap FTSE 250 slipped 0.38%.

  • Brent crude futures were trading above $100 a barrel as the ongoing attacks on shipping by the U.S. and Iran led markets to prepare for potential supply disruptions.
  • Energy stocks opened new gains, rising 0.8%, with Shell and BP extending their rally, up 0.7% and 1% respectively.
  • U.S. President Donald Trump indicated that he anticipated the conflict would conclude following the November U.S. midterm elections; however, this statement failed to assuage investor concerns.
  • Banks were the biggest drags on the index. HSBC opened a new tab and declined over 1.8% after announcing that its CFO Pam Kaur would step down in 2027.
  • Both precious and industrial metal miners declined, with Rio Tinto and Anglo American down 0.9% and 1.5%, respectively, even as metal prices gained.
  • British government bond yields increased, with the benchmark 10-year bond reaching a 19-year peak and shorter-dated bonds at their highest levels since late 2023.
  • Traders are poised for the release of U.S. inflation reports and UK economic growth data this week, as these figures may influence interest rate expectations in their respective economies.
  • Markets are pricing in a 60% probability that the U.S. Federal Reserve will increase rates next week, while there is a broad expectation that the Bank of England will maintain its current stance, according to data compiled by LSEG.
  • Associated British Foods bottomed the FTSE 100 with an 11.8% slide after it forecast a decline in fourth-quarter like-for-like sales at budget fashion chain Primark.
  • Animal genetics company Genus opened a new tab, experiencing a decline of 4.9% following its annual adjusted revenue, which did not meet analysts’ consensus estimates.
  • British e-commerce group THG experienced a decline of 7.1% following a warning regarding a slowdown in its quarterly revenue growth, attributed to new EU import duties.