Energy stocks drag FTSE 100; Taylor Wimpey shines
(Reuters) – London’s FTSE 100 inched lower on Tuesday, dragged down by energy stocks as oil prices slipped over fears of slowing demand in China, while Taylor Wimpey jumped after resuming dividend payments.
The commodity-heavy FTSE 100 index fell 0.1%, with oil heavyweights BP and Royal Dutch Shell being the biggest drags.
Oil prices slid more than 1% as expectations that OPEC would agree to raise oil supply in a meeting this week weighed on sentiment, already hit by concerns over slowing Chinese demand. [O/R]
“Market sentiment has been harmed somewhat by comments from head of China’s regulator that the bubble in financial markets may one day pop,” said Connor Campbell, a financial analyst at SpreadEx.
Guo Shuqing, head of the China Banking and Insurance Regulatory Commission, expressed wariness about the risk of asset bubbles in foreign markets.
“The budget tomorrow has given an air of caution in today’s trading and it may find hard to move higher without much purpose or focus.”
UK finance minister, Rishi Sunak, geared up to announce more borrowing on top of almost 300 billion pounds ($418 billion) of COVID-19 spending and tax cuts as part of his annual budget statement on Wednesday.
A raft of global stimulus has helped the FTSE 100 recover about 35% from a coronavirus-driven crash last year, but the possibility of rising inflation and higher bond yields has rattled sentiment recently.
The domestically focused mid-cap FTSE 250 index rose 0.1%, led by gains in information technology stocks.
Meanwhile, British house price growth picked up unexpectedly in February, rising to 6.9% in annual terms from 6.4% in January, mortgage lender Nationwide said.
Taylor Wimpey, Britain’s third-largest homebuilder, rose 2.7% to the top of the blue-chip index, as it said the 2021 selling season has started well ahead of possible additional incentives for the sector in the budget.
Travis Perkins, Britain’s biggest seller of building materials, fell 2.3%, after it restarted the process of demerging its Wickes home improvement business.
Fresnillo Plc fell 1.8% after warning about the uncertainty of the COVID-19 pandemic’s impact in Mexico.
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