Key Points
- FTSE 100 closing price of 6,950.63, -1.2%
- Oil names lower as Iran deal close
- Cryptocurrencies fall in wake of China crackdown
- UK inflation picks up
By Samuel Indyk
Investing.com – The FTSE 100 fell on Wednesday amid a broad based decline in basic materials and oil & gas companies.
BP (LON:BP) and Royal Dutch Shell (LON:RDSa) were both lower as crude oil declined. The weekly EIA crude oil inventory data showed a smaller than expected build in US crude stocks. WTI and Brent crude futures both remained sharply lower following the data having fallen after comments from the Russian Envoy to the UN regarding the Iranian nuclear deal. Wednesday’s meeting ended without a formal agreement but the EU politic director said was “quite confident” that a final agreement will be reached.
Rising to the top of the FTSE 250 was Future PLC (LON:FUTR) after the company said they see profit exceeding analyst expectations for the full year following a strong H1.
John Laing Group (LON:JLG) shares rose by over 11% after the company announced they had agreed to be taken over by KKR in a deal worth £2bln.
The big moves in the day came in the cryptocurrency space. Bitcoin fell by almost 30% to around $30,000 before finding some support. The collapse in prices came after financial institutions in China were warned that accepting cryptocurrencies as payment or offering goods and services for sale priced in cryptocurrencies could be a criminal offence.
Other cryptocurrencies also fell following the news with Ethereum dropping below $2,000 before paring back some of the losses.
Further denting sentiment was a snippet from the ECB’s Financial Stability Review that said the surge in the price of Bitcoin eclipses bubbles such as “tulip mania”.
GBP was lower against both the EUR and USD despite signs of inflation picking up in the UK. CPI rose more than doubled to 1.5% from 0.7% marking the highest reading for the index since March 2020 at the onset of the pandemic. Nevertheless, the figure still remains below the Bank of England’s 2% target and will give the central bank some breathing room before they make any decisions on asset purchases or interest rates.
GBP/USD dropped back below 1.42 but ranges in FX markets were relatively narrow compared to the moves seen in other asset classes.
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