The FTSE 100, the UK’s leading stock index, experienced a slight dip of 0.1% on Tuesday due to lower oil prices that put pressure on energy stocks. Meanwhile, the FTSE 250, the mid-cap index, saw a marginal increase of 0.1%. This movement in the markets comes ahead of a crucial budget update expected later in the week.
Oil futures, which had seen significant gains in the past two sessions, took a downward turn as investors turned cautious ahead of an OPEC+ meeting scheduled for Sunday. At the meeting, the oil-producing group will discuss the possibility of deepening supply cuts. As a result, heavyweight energy stocks in the FTSE 100 lost 0.6% as they closely tracked the declining oil prices.
Furthermore, the strength of the sterling against the dollar added further pressure to the exporter-heavy benchmark index. A 0.2% rise in the sterling made it more challenging for export-oriented companies within the FTSE 100 to remain competitive on the global market.
On a positive note, data released showed that Britain borrowed less than expected during the first seven months of the financial year. This development comes just one day before the country’s finance minister, Jeremy Hunt, is anticipated to announce tax cuts aimed at stimulating the sluggish economy. These tax cuts are part of a broader plan to boost growth.
While the FTSE 100 experienced downward pressure due to lower oil prices and a strong sterling, the FTSE 250 received a boost from Cranswick, a meat producer. Cranswick’s shares rose by 3.5% after the company projected its annual profit to be at the upper end of current market estimates.
In conclusion, although lower oil prices and a strong sterling weighed down the FTSE 100, the FTSE 250 managed to stay afloat with the help of positive projections from Cranswick. Investors will continue to closely monitor oil prices and the upcoming budget update for further market movements.
FAQ
What is the FTSE 100?
The FTSE 100 is a stock market index that represents the 100 largest publicly-listed companies on the London Stock Exchange, based on market capitalization.
What is the FTSE 250?
The FTSE 250 is a stock market index that includes the 250 companies listed on the London Stock Exchange below the FTSE 100. These companies are considered mid-cap stocks.
What is OPEC+?
OPEC+, also known as the OPEC Plus Alliance, is a group of oil-producing countries led by the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC members, including Russia. The alliance aims to stabilize and influence oil prices through coordinated production cuts and other measures.
Sources:
– Reuters. “UK’s FTSE 100 inched down on Tuesday,” Reuters, Nov 21, 2019. [link removed]