FTSE 100 sinks on back of weak commodity stocks

Market report

The FTSE 100 slid into the red as it was held by weaker commodity stocks, caution over further lockdowns in Europe and a rising pound.

Trading sentiment was kept low by fears that the reintroduction of some pandemic restrictions in Europe could drag on the continent’s potential for recovery.

Traders in London were the most cautious as concerns this could hamper the energy markets weighed on the major listed oil and commodity firms.

London’s top flight closed 38.06 points, or 0.57%, lower at 6,674.83 on Thursday.

Connor Campbell, financial analyst at Spreadex, said: Risk-off was the mood this Thursday, with growing fears of a Covid-19 third wave in Europe dragging on sentiment.

“Oddly, the losses were at their most limited in the Eurozone, despite being the source of much of the renewed Covid-19 anxiety.

“Out and out the worst performer was the FTSE 100, as much of the index’s pain derived from the pound’s pleasure.’’

The German and French markets were just below flat as trading was broadly subdued throughout the session.

Elsewhere, the German Dax decreased by 0.01% and the French Cac moved 0.09% lower.

Across the Atlantic, the Dow Jones tumbled to its worst price in two weeks despite comments from Fed chair Jay Powell that suggested the Federal Reserve was much more confident in the prospect of an economic rebound.

Meanwhile, sterling bounced following the suggestion that the EU may not go ahead with a vaccine export ban hinted earlier in the week.

The pound increased by 0.34% versus the US dollar to 1.373 and was up 0.71% against the euro at 1.166.

In company news, shares in Natwest Group dropped after its Ulster Bank business was hit with a record 38 million euro fine by the Central Bank of Ireland.

The central bank said on Thursday that its investigations found serious failings in the treatment of Ulster Bank Ireland’s tracker customers holding 5,940 mortgage accounts over an almost 16-year period.

Shares were 6.35p lower at 189.6p at the close of play.

Travel firm Tui saw shares dip after it cut its summer holiday schedules amid new coronavirus restrictions in Europe.

Shares were down 17.6p at 361p at the end of trading on Thursday.