London’s FTSE 100 experienced its sharpest decline in nearly a month on Tuesday, led by a downturn in banking stocks and energy giant BP. At the same time, investors showed little reaction to Federal Reserve Chair Jerome Powell’s testimony before the US Congress.
The blue-chip FTSE 100 dropped 0.7%, marking its third consecutive day of losses.
The top performer was water company Severn Trent, which rose by 2.5%, followed by Pershing Square with a 1.8% increase. The biggest decliner was Burberry, down by 4.5%, followed by BP, which fell by 4.3%.
Similarly, the mid-cap FTSE 250 also decreased by 0.7%. The leading gainer was Aston Martin, up by 5.6%, followed by Moonpig, up by 3.6%. The largest loser was engineering group Goodwin, down by 9%, followed by recruitment company Hays, which declined by 6%
Banking stocks were the heaviest drag on the index, as markets were reportedly unsettled by Bank of England policymaker Jonathan Haskel’s remarks on Monday, maintaining his stance on keeping interest rates unchanged.
Barclays, HSBC, and Lloyd’s all saw declines between 3% and 4%.
Fiona Cincotta, senior markets analyst at City Index, commented:
“His [Mr. Haskel’s] comments dampened sentiment towards banks, a sector where margins are being squeezed by high interest rates.”
The energy sector declined 1.3%, pressured by a 4.3% drop in BP shares after the company warned of a potential hit to its second-quarter earnings due to lower realised refining margins and weak oil trading.
Conversely, precious metal miners gained 0.7% in line with rising gold prices.
