The FTSE 100 was unable to overcome multiple headwinds on Tuesday, while stocks in the US got off to a hot start.
European stocks succumbed to geopolitical worries and pre-central bank meeting trepidation. This week, stocks must negotiate a pair of central bank interest rate decisions, amid a backdrop of inflationary fears, and Russia's continued invasion of Ukraine.
Brent Crude prices, meanwhile, fell below the $100 a barrel mark for the first time since the start of the month. Airline stocks got a boost, meanwhile, as the UK removed all remaining Covid travel curbs.
The FTSE 100 index ended down 17.77 points, or 0.3%, at 7,175.70 on Tuesday. The mid-cap FTSE 250 index ended down 213.59 points, or 1.0%, at 20,257.66. The AIM All-Share index ended down 12.21 points, or 1.2%, at 987.70.
The Cboe UK 100 index ended down 0.4% at 713.24. The Cboe 250 closed down 1.2% at 17,861.41, and the Cboe Small Companies lost 1.0% at 14,405.93.
In mainland Europe, the CAC 40 stock index in Paris closed down 0.2% and the DAX 40 in Frankfurt fell 0.1%.
The dollar was stronger ahead of the Federal Reserve’s interest rate decision on Wednesday.
The pound fell to $1.3049 late Tuesday, from $1.3059 at the London equities close on Monday. The euro faded to $1.0957 from $1.0991. Against the yen, the dollar advanced to JP¥118.26 from JP¥117.98.
While trading in foreign exchange markets lacked substantial moves, oil prices fell markedly.
Brent oil fell back below $100 a barrel for the first time since March 1, trading as low as $97.42 on Tuesday.
At the London equities close, a barrel of Brent fetched $101.36, down from $105.30 late Monday. Oil was undergoing a sell-off as European nations looks increasingly likely to not wean off Russian oil supply immediately.
Stocks exposed to the Chinese economy fell on Tuesday, thanks to urging Covid cases and lockdowns in the country. Miner Glencore fell 4.4%, Asia-focused insurer Prudential lost 4.2% and investor JPMorgan China Growth & Income shed 7.1%.
Gold miners Polymetal and Petropavlovsk were also notable fallers.
Index provider FTSE Russell late Monday said a number of Russia-linked companies will be deleted from the FTSE Russell indices due to insufficient liquidity.
The deletions will come into effect on Monday next week.
Polymetal tumbled 23% and Petropavlovsk plunged 27%.
Pearson extended gains on Tuesday, rising 8.7%, amid hopes of a private equity buyout. The publishing and education company on Friday confirmed Apollo Global Management has made two cash offers for the company.
Travel stocks were also on the up, with budget carrier easyJet among the best of the lot, rising 2.3%.
Companies and trade organisations in the air travel industry have welcomed the end of remaining UK Covid travel restrictions.
Heathrow Airport said it would be dropping the requirement for passengers to wear masks in its premises following the UK government’s announcement that all measures, including passenger locator forms, will end on Friday.
Transport Secretary Grant Shapps said on Monday the changes will allow ‘greater freedom in time for Easter’ and will mean ‘you can travel just like in the good old days’.
Fading Brent prices have also boosted airline stocks. High oil prices mean chunkier jet fuel costs for poorly-hedged carriers.
TP ICAP fell 15% after the interdealer broker reported a plunge in profit in 2021, despite a slight rise in revenue, blaming ‘unusually quiet secondary markets’, particularly in the first half of last year.
TP ICAP reported £24 million in pretax profit, down from £129 million in 2020, though revenue rose by 4.0% to £1.87 billion from £1.79 billion. Despite the fall in profit, the company boosted its annual dividend by more than 50% to 9.5 pence per share from 6.0p.
Gold was quoted at $1,926.06 an ounce late Tuesday, lower than $1,957.83 on Monday.
While the mood in Europe was cautious, New York equities made sizeable strides.
At the time of the closing bell in London, the Dow Jones Industrial Average was up 1.4%, the S&P 500 up 1.7% and the Nasdaq Composite 2.2% higher. The focus in the US has shifted to the upcoming Fed rate decision.
The Fed announces its latest interest rate decision at 1800 GMT on Wednesday. Elsewhere, the economic calendar has US retail sales at 1230 GMT.
The UK corporate calendar has annual results from mixers maker Fevertree Drinks, gold miner Centamin and low-cost gym chain operator Gym Group.
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