The FTSE 100 fell on Thursday as debt ceiling fears stepped up ahead of the crunch date at the beginning of June.
The FTSE 100 was down 0.7% at the time of writing on Thursday.
“The FTSE 100 continued to lose ground on Thursday as the US debt ceiling crisis remained unresolved with the beginning of June deadline rapidly approaching,” said AJ Bell investment director Russ Mould.
“Asian markets hit two-month lows as investors looked for safe-haven assets in an attempt to build some insurance into their portfolios. This is aimed at protecting against the still unlikely risk that the US defaults on its debt.”
Washington regularly goes through political wrangling ahead of debt ceiling limits, and investors have become desensitised to the ramifications of shutting down key US government departments.
Nonetheless, traders took the opportunity to take cash off the table and await a resolution.
FTSE 100 movers
Centrica was one of few FTSE 100’s gainers after the UK government announced the energy price cap would be reduced in July. The move would make the domestic energy market more competitive and potentially help Centrica win new customers.
Coca-Cola HBC was the FTSE 100’s top faller despite raising revenue guidance and maintaining earnings forecasts. Coca-Cola HBC was down 5% at the time of writing.
BP and Shell were major drags on the index as oil prices fell on concerns about demand. Shell and BP were down 2.2% and 2.4%, respectively.
