The FTSE 100 fell on Tuesday in tandem with global equity markets and hit a 7-month low building on October’s declines.
The FTSE 100 sell-off was broad with poor company results and sharp declines in oil dragging the index well beneath the 7,000 level.
Brent and WTI oil fell as much as 2% after Saudi Arabia said they were prepared to step in and ramp up production to fill the gap left by Iranian sanctions.
BP (LON:BP) and Royal Dutch Shell (LON:RDSB) were down 1.5%-2.1% accounting for a large proportion of the Footsie’s fall.
Oil also fell as Turkish President Erdogan delivered a speech on his government’s investigations on the murder of Saudi journalist Khashoggi which implicated the Saudi leadership in the murder but stopped short of any major threats. This would suggest that Turkey didn’t have the backing of allies such as the USA for any major action that could destabilise the flow of Saudi oil to the global economy.
Poor corporate results
The market has also been unnerved by a string of disappointing corporate releases adding to the downside in London.
St James’ Place were down over 5% following an update revealing the wealth firm had hit £100bn in assets under management but the pace of new business had slowed.
CEO Andrew Croft commented on the results:
“We have delivered this continued growth despite both tough comparatives and a more challenging environment for the industry, once again demonstrating our resilience in these market conditions.
“There remains growing demand for high-quality financial advice, notwithstanding the current macro and geo-political uncertainty.”
Scottish Mortgage Investment Trust was also a big drag on the index after US indices finished heavily in the red overnight. The Scottish Mortgage Investment Trust counts major tech stocks Amazon, Alibaba and Netflix as top ten holdings.
The FTSE 100 was down 1.05% to 6,979 at 14.35 in London.
