The FTSE 100 was on the back foot on Tuesday as fears about the US debt ceiling lingered. Weaker oil prices dragged the index, with BP and Shell falling.
The FTSE 100 was down 0.8% at the time of writing.
“A deal may have been struck on the debt ceiling, but it’s not fully calmed nervousness on financial markets. Limits on spending are being imposed just as America looks set to head towards recession, which could make it harder for growth to snap back,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“Clamour from dissenting voices on both sides of the political divide are rising, ahead of a crucial Congressional vote later today. Nevertheless, the US does appear to be inching towards Budget agreement, although it’s likely to take a good deal of wrangling this week before it’s passed.”
Major US indices outperformed Europe with help from tech stocks and Tesla.
Nvidia was again pushing higher as the hype around AI provided continued support for the stock. Last week, the chipmaker revealed strong revenue forecasts directly for the adoption of AI.
Tesla shares were higher on hopes the EV maker would see further growth in China as Elon Musk met with Chinese officials.
FTSE 100 movers
FTSE 100 Oil majors were a large drag on the index as oil prices dipped on growth fears. BP and Shell were down 2.2% and 2.7%, respectively.
Unilever shares were lower as key staff departed ahead of the new CEO’s arrival. The CFO and marketing head will soon be clearing their desks. Unilever shares were 2.9% down at the time of writing.
Rolls Royce was off by 2.3% after reports India launched criminal proceedings against BAE Systems and Rolls Royce for the procurement of fighter jets.
