It was evident the City was winding down for Christmas on Tuesday as the FTSE 100 gently undulated around the unchanged level on lower volumes.
Yesterday, London’s leading index played catch up with US equities as oil prices helped lift BP and Shell after BP said they were rerouting their oil vessels away from the Red Sea after a string of attacks by Yemeni militants.
This support was absent from UK stocks today as BP and Shell fell 0.8% and 0.4%, respectively.
Reports that a coalition of Navies led by the US was heading to the Red Sea spurred traders to close long positions in oil futures. Brent and WTI retreated on Tuesday.
Global equities are likely to be supported by interest hopes through the festive period. Although the FTSE 100 is lagging behind US peers, London’s leading index is set to support statistics pointing to a festive rally.
The conversations around when the Bank of England and Federal Reserve will cut rates will likely continue into the new year. However, with traders away from their desks and newsflow slowing, we’ve likely seen the biggest equity market moves for 2023.
“It feels like the party which started last Wednesday when the Federal Reserve signalled potential rate cuts in 2024 has fizzled out – as the central bank has looked to put a lid on market hopes for an easing in monetary policy,” said AJ Bell investment director Russ Mould.
Ocado was one FTSE 100 company that was definitely carrying on the party on Tuesday, with gains of 4%. The premium retailer is considered as a tech stock by many and trades more like Tesla than Sainsbury’s.
Ocado is the FTSE 100’s best performer in December so far, gaining a bumper 25%.
