The FTSE 100 fluctuated between positive and negative territory on Tuesday as investors tried to make sense of the messaging around the Middle East conflict.
It was a much quieter affair on Tuesday after London’s leading index surged 300 points in minutes on Monday. But trading remained choppy, with the FTSE 100 giving up around 80 points from peak to trough in the early stages of trade before recovering.
The FTSE 100 was 0.1% higher at the time of writing as investors tried to make sense of conflicting information from the US and Iran about supposed peace talks.
“According to President Donald Trump, preliminary truce talks have begun with Iran. According to Iran, he’s living in la-la-land and the talks never happened,” said Emma Wall, Chief Investment Strategist, Hargreaves Lansdown.
“But the markets love hope, and the prospect of a ceasefire was enough to push Brent crude oil down 11% yesterday to below $100 a barrel for the first time in weeks. But the Iran denial, and a report that the UAE and Saudi Arabia are considering entering the war, has sent oil back up to $103.”
The rise in oil inevitably caused some nervousness among investors and interest rate-sensitive sectors.
Housebuilders were down again on Tuesday as oil prices remained above $100, with some analysts predicting rate hikes this year – something the UK property market could do without.
An uncertain outlook issued by Bellway on Tuesday didn’t help their cause, and Barratt Developments, Persimmon, and Berkeley Group Holdings all fell between 1% and 1.5%.
Antofagasta was the FTSE 100’s biggest faller, down 2%, as investors moved away from cyclical sectors, including miners.
Kingfisher gave up early gains despite the B&Q owner posting reasonable revenue growth and delivering on its strategic goals.
“It looks like we’re in another wave of ‘do it for me’ in terms of home improvements as B&Q owner Kingfisher reports a surge in sales to tradespeople,” said Dan Coatsworth, head of markets at AJ Bell.
“A lot of people can’t be bothered with spending their evenings and weekends painting the house or fixing a fence. It’s a lot simpler to get a tradesperson to do the work, and those experts must source the materials from somewhere.”
“B&Q has been pushing hard on the trade channel in recent years, and its efforts are now paying off. Tradespeople want to be able to go to a store, find what they need quickly, and not pay through the nose for goods as that cost is passed onto the end-customer.”
ConvaTec was the FTSE 100’s top riser, adding 2.4%.