London close: FTSE retreats ahead of 'blockbuster Thursday' as oil, utility stocks ebb
Stocks in London retreated to a lower close as falling oil, utility and pharmaceutical companies decided the outcome ahead of 'blockbuster Thursday' and the UK general election.
On the following day, the market would be glued to the much-discussed UK election and its uncertain outcome, as well as the European Central Bank's policy meeting and, separately, testimony from ex-FBI boss James Comey to a Senate panel.
Against this fabric, the FTSE 100 closed down 0.62% to 7,478.62, and the FTSE 250 edged higher by 0.21% to 19,695.92. Other key indices in Europe closed mildly firmer, while Wall St made minor gains.
"The FTSE 100 is offside as dealer's cash in their chips ahead of the UK general election tomorrow," said David Madden, market analyst at CMC Markets UK.
"Volatility is anticipated to be low until traders have a better idea of what the election outcome will be," said Madden.
"The Cac and the Dax received a boost after a leak informed the market that the ECB are planning on reducing the inflation forecast for the Eurozone," he added.
Returning to the UK and tomorrow's ballot, James Trescothick, senior global strategist at easyMarkets, pondered several different outcomes.
A victory by the Tories and PM Theresa May with a majority of less than 20 seats would see a strong sell-off in sterling, whereas a win with a 50-plus seat majority could see a far more positive reaction from sterling.
"If Labour did indeed win you might see the sterling come under a lot of pressure falling as low as $1.20 against the US dollar, due to the fact that (Labour leader Jeremy) Corbyn is not seen as a strong opposition for the EU," said Trescothick.
He said a hung parliament could produce total chaos in the market. "Sterling is likely to crash on this outcome," said Trescothick.
"With this result securing any deal with the EU will prove to be very difficult as any set direction for negotiations will be lost amongst all the bickering that will very likely occur between all the parties in the commons."
On the stocks front in London, oil majors BP and Shell suffered as the latest figures from the US Energy Information Administration revealed a bigger than expected build in stores last week, contrary to American Petroleum Institute figures last night that showed a draw.
Other blue-chip sectors that were prominently lower included pharmaceuticals and utilities, with retail and supermarkets also featuring on the FTSE 100 fallers' board.
House builders did relatively well on news this morning from Halifax that the UK housing market had fared better than expected in May, although the annual rate of price gains was cooling.
Meanwhile, RBS gained after Investec changed its rating from 'Sell' to 'Hold', and it upped its price target from 240p to 260p. RBS reached a £200m settlement with shareholders in relation to the rights issue the bank held during the credit crisis.
WPP shares were down after its trading update was received poorly. Anglo American was firmer after it announced the appointment of Stuart Chambers as its chairman.
AstraZeneca was in the red as it entered an agreement with Grünenthal for the global rights to Zomig (zolmitriptan) outside Japan.
FTSE 100 - Risers
Persimmon (PSN) 2,393.00p 2.05%
Lloyds Banking Group (LLOY) 70.08p 1.65%
Standard Life (SL.) 381.00p 1.57%
Taylor Wimpey (TW.) 181.80p 1.56%
Hargreaves Lansdown (HL.) 1,395.00p 1.38%
Royal Bank of Scotland Group (RBS) 255.10p 1.35%
3i Group (III) 944.50p 1.29%
Direct Line Insurance Group (DLG) 347.30p 1.25%
Hammerson (HMSO) 587.00p 1.21%
Legal & General Group (LGEN) 254.00p 1.20%
FTSE 100 - Fallers
Shire Plc (SHP) 4,376.50p -3.22%
WPP (WPP) 1,676.00p -2.61%
Babcock International Group (BAB) 906.00p -2.00%
Johnson Matthey (JMAT) 2,979.00p -1.97%
Tesco (TSCO) 178.40p -1.79%
BP (BP.) 456.80p -1.74%
Associated British Foods (ABF) 2,970.00p -1.66%
Reckitt Benckiser Group (RB.) 7,976.00p -1.63%
Sage Group (SGE) 696.50p -1.62%
Convatec Group (CTEC) 325.30p -1.54%
FTSE 250 - Risers
St. Modwen Properties (SMP) 352.90p 6.23%
Ferrexpo (FXPO) 175.10p 4.66%
Derwent London (DLN) 2,685.00p 4.07%
Workspace Group (WKP) 874.50p 4.05%
Nostrum Oil & Gas (NOG) 526.00p 3.34%
CYBG (CYBG) 270.50p 3.28%
Hastings Group Holdings (HSTG) 322.60p 3.13%
Domino's Pizza Group (DOM) 316.30p 2.96%
NMC Health (NMC) 2,329.00p 2.96%
Countryside Properties (CSP) 326.90p 2.61%
FTSE 250 - Fallers
Ocado Group (OCDO) 284.00p -7.91%
RPC Group (RPC) 788.50p -7.24%
Entertainment One Limited (ETO) 226.10p -3.95%
Indivior (INDV) 323.20p -3.20%
Tate & Lyle (TATE) 734.50p -2.59%
Intermediate Capital Group (ICP) 847.00p -2.42%
Go-Ahead Group (GOG) 1,749.00p -2.35%
Capita (CPI) 540.50p -2.26%
Allied Minds (ALM) 135.40p -1.88%
Wood Group (John) (WG.) 692.00p -1.84%