FTSE 100 dips as US markets buoyed by hopes of rate cut
London’s top flight closed down by 5.78 points at 7,530.69 points
The FTSE 100 was subdued as investor sentiment in the UK failed to match positivity in the US, where the Dow Jones jumped after the Federal Reserve chief suggested a rate cut could be on the cards.
London’s top flight closed down by 5.78 points at 7,530.69 at the close of trading.
A boost to sterling following fairly positive GDP data for May held back the FTSE 100 throughout trading on Wednesday.
The US indices moved higher as investors felt that “more accommodating” monetary policies are all but certain at the Fed’s July meeting.
David Madden, market analyst at CMC Markets UK, said: “Stocks were mixed as Jerome Powell, the head of the Fed, testified in Washington DC.
“Mr Powell’s comments helped US stocks get off to a solid start. The central banker said there was a case of somewhat easier monetary policy at the June meeting, and he cautioned that uncertainties have continued since the last Fed meeting.”
The European markets drifted on the back of the improvements in the US markets.
The German Dax decreased by 0.51%, while the French Cac fell back by 0.08%.
Sterling was buoyed by the return to monthly GDP growth and the dovish statement from Mr Powell, pushing it up against the dollar from a six-month low.
The pound was up 0.37% at 1.250 versus the US dollar, while was down 0.15% at 1.110 against the euro.
In stocks, Superdry saw shares decline after its new management team pledged to return to profitable growth, as it posted a significant loss.
The group reported a loss before tax of £85.4 million for the year to April 27, compared with a £65.3 million profit this time last year.
The clothing brand saw shares close down 8.4p at 439p.
Shares in Wetherspoon’s lifted after the pub chain posted a solid rise in sales, bucking the trend in a pub market struggling to beat last year’s World Cup summer.
The value pub chain said like-for-like sales in the 10 weeks to July 7 were up 6.9%, consistent with growth in the year to date of 6.7%.
It saw shares rise by 36p to 1,444p at the close of trading.
Barratt Developments upped its full-year earnings outlook after it said completions have surged to an 11-year high, edging its share price higher.
Britain’s biggest housebuilder said it delivered 17,111 homes, excluding joint ventures, in the year to June 30 – up 2.6% on the previous year.
Barratt’s shares closed up 7.8p at 584.2p on Wednesday.
Dunelm saw shares slip into the red despite posting solid fourth quarter sales figures.
Shares in the company fell by 17p to 870p at the end of trading.
The price of oil surged higher in the wake of the Energy Information Administration’s most recent update, which showed a fall in oil and gasoline stockpiles.
The price of a barrel of Brent crude oil rose by 2.81% to 66.3 US dollars.
The biggest risers on the FTSE 100 were Smurfit Kappa, up 74p at 2,540p, Antofagasta, up 15.2p at 863.2p, Scottish Mortgage Investment Trust, up 9.5p at 558.5p, and Imperial Brands, up 34p at 2,015p.
The biggest fallers on the FTSE 100 were Micro Focus, down 233p at 1,753p, Coca-Cola HBC, down 56p at 2,726p, WPP, down 19.6p at 961p, and British Land, down 10.6p at 540p.