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London equities fall as energy stocks dip; U.S. debt ceiling vote eyed

Published 31/05/2023, 08:27
© Reuters. FILE PHOTO: A worker shelters from the rain under a Union Flag umbrella as he passes the London Stock Exchange in London, Britain, October 1, 2008.  REUTERS/Toby Melville/File Photo
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By Johann M Cherian and Shashwat Chauhan

(Reuters) - Britain's commodity-heavy stock indexes slid on Wednesday as weak China economic data drove commodity prices lower, while sentiment remained fragile ahead of a crucial vote on the U.S. debt ceiling issue.

The exporter-heavy FTSE 100 logged a more than 5% drop in May, its worst May performance since 2015, as international factors like the U.S. debt deal uncertainty and worries of stalling global growth weighed on the minds of investors.

The domestically focused FTSE 250 also clocked a 3.6% monthly decline.

For the day, the FTSE 100 dropped 1%, logging a fresh two-month low as heavyweight energy firms fell 2.7% after weak China economic data clouded the outlook for raw materials. [O/R]

China-focused Prudential (LON:PRU) fell 6.1% after the life insurance firm said its finance chief would leave the company following an investigation into a recent hiring at the company showed his conduct had fallen short of standards.

The bill to lift the U.S. government's debt ceiling is due to vote on Wednesday in the U.S. House of Representatives.

"Until it (U.S. debt ceiling bill) has been verified through the House of Representatives, there seems to be a bit of concern," said Christopher Peters, trading floor manager at Accendo Markets.

The mid-cap FTSE 250 shed 0.5%, weighed by a 6.2% drop in Drax Group (LON:DRX) after energy regulator Ofgem said it was investigating if the power firm was in breach of annual profiling reporting requirements.

In a bright spot, B&M European Retail SA surged 8.0% after the discount retailer forecast higher annual core profit.

© Reuters. FILE PHOTO: A worker shelters from the rain under a Union Flag umbrella as he passes the London Stock Exchange in London, Britain, October 1, 2008.  REUTERS/Toby Melville/File Photo

Entain (LON:ENT) shed 4.0% after the Ladbrokes-owner said it was likely to get slapped with a financial penalty as part of a probe.

Ocado (LON:OCDO) Group slid 5.8% as the online supermarket and technology business is expected to be demoted to the FTSE 250 midcap index after Wednesday's close.

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