LONDON: London’s FTSE 100 ended lower on Monday, as gains in consumer staples on the back of weaker pound were countered by weaker energy stocks as oil prices fell on China demand worries.
After rising as much as 0.75%, the blue-chip FTSE 100 closed 0.1% lower, with oil majors BP Plc and Shell Plc down nearly 2.5% each.
Oil prices dropped more than $6 as fears grew over weaker fuel demand in China after financial hub Shanghai’s lockdown to curb a surge in COVID-19 infections.
Shares in global companies including Unilever, Reckitt Benckiser rose 1.2% and 2.9% respectively, and were among top boosts supported by weaker pound.
“Europe is probably benefiting slightly from the pullback we’re seeing in energy markets... but ultimately, I don’t feel like positions have massively changed from late last week, which is kind of a sit-and-wait period,” said Craig Erlam, a senior analyst at OANDA.
Investors were focused on Ukraine and Russia’s first face-to-face peace talks in more than two weeks on Monday, but a senior US official said Russian President Vladimir Putin did not appear ready to make compromises to end the war.
Meanwhile, Bank of England Governor Andrew Bailey said swings in commodity markets after Russia’s invasion of Ukraine posed a risk to financial stability and the challenges facing the world economy are bigger than after the global financial crisis.
The domestically focussed FTSE 250 midcap index advanced 0.5%, boosted by travel and leisure stocks.
Among individual stocks, Barclays declined 4.1% after the lender disclosed around a 450 million pound ($591.80 million) loss on mishandled bond trades and said this meant it would have to delay a share buyback.
Aero-engine maker Rolls-Royce tumbled 10.7% to the bottom of the FTSE 100 after a near 20% surge on Friday.