The FTSE 100 was down 0.9% and closed at 7,532.9 on Wednesday as the price of oil fell below the $120 mark, with Brent Crude trading at $117 per barrel as OPEC signalled a possible end to its ties with Russia, sparking hopes that the organisation could start increasing production.
The outcome of OPEC’s decision tomorrow could dent energy stocks after the boost beyond $120 per barrel earlier this week.
Shell and BP shares dropped 0.6% to 2,362p and 0.5% to 431.8p as the oil giants took the hit of lowered prices.
The other side of the Atlantic saw a poor slate of returns in the US markets, with the NASDAQ down 0.4% to 12,081.3 and the S&P 500 dropping 0.6% to 4,132.1.
The US is scheduled to report its latest jobs reading on Friday, and depending on the direction the markets take in light of the data, UK markets could wake up to a nasty shock as inflation concerns loom on the horizon.
“By the time investors have returned after the festivities they could be facing a big hangover depending on the turn Wall Street takes over the next few days and the latest US jobs reading due on Friday. Inflationary concerns look set to continue to dominate the market mood.” said AJ Bell investment director Russ Mould.
Nationwide highlighted a “surprising amount of momentum” in the housing market, following a 0.9% monthly climb in prices in May.
“May saw a slight slowing in the rate of annual house price growth to 11.2%, from 12.1% in April – the tenth successive monthly increase, which kept annual price growth in double digits.” said Nationwide chief economist Robert Gardner.
However, Nationwide confirmed an anticipated slowdown in the housing market as the year progressed, with the cost of living and 9% inflation estimated to dampen demand for homebuyers.
“We continue to expect the housing market to slow as the year progresses. Household finances are likely to remain under pressure with inflation set to reach double digits in the coming quarters,” said Garnder.
Housing stocks gained on the report, with Reckitt Benckiser climbing 0.4% to 6,166p and Berkeley Group rising 0.9% to 4,238p.
