The FTSE 100 moved tentatively to the downside as investors digested results of the US midterm elections and enthusiasm around oil and China subsided.
US election results were still coming in at lunchtime on Wednesday with the chances of a big win for Republicans looking unlikely. If Biden loses either the House or Senate, it will make it extremely difficult to push his agenda through and render him powerless.
“The red wave promised overnight turned out to be more of a pinkish swell with the result of crucial midterm elections still in the balance as trading began in the UK on Wednesday morning,” said AJ Bell investment director Russ Mould.
“Amid the uncertainty the FTSE 100 was modestly lower. A continuing slide in oil prices, as initial excitement about a reopening of the Chinese economy has waned, helping to put energy stocks under continued pressure.”
Shell and BP were down 1.5% and 0.2% respectively dragging on the index.
Mould went on to highlight it is not what is happening today, but what might happen tomorrow with US inflation, as the biggest driver of markets on Wednesday.
“What might have greater impact on markets than the latest political ructions across the Atlantic are the inflation figures due out in the US tomorrow as traders play their usual game of trying to guess when the Fed might finally pivot away from rate rises,” said Mould.