Markets steady, oil up after Opec output cut
The FTSE 100 index finished marginally higher last night as stronger energy and commodity stocks helped protect London’s top flight from volatility elsewhere.
In contrast, the UK-exposed FTSE 250 index and Stoxx Europe fell by 1.2% after Monday’s jump in gas prices caused by the suspension of the Nord Stream pipeline spooked traders.
CMC Markets expects European indices to open broadly unchanged and the FTSE 100 index to slip 10 points at 7277, aided by stronger trading in Asia this morning. US markets were closed for a public holiday yesterday, having fallen sharply on Friday.
Sterling spent most of yesterday’s session close to its lowest level in over 30 years before recovering off its intraday lows.
Deutsche Bank pointed out today that sterling has been the worst performer among the G10 currencies since Boris Johnson’s resignation on 7 July, having fallen by 4.2% against the US dollar.
CMC’s chief market analyst Michael Hewson said opinion is divided on whether there’s more to come in terms of pound weakness.
He added: “While some short-term borrowing is unavoidable given the current challenges, the main focus will be on what steps the government intends to take to keep energy prices down and deal with the UK’s longer term energy security.”
Brent crude futures, meanwhile, remained edged up to $95 a barrel after Opec and its allies agreed a small cut to output to reflect growing economic headwinds.