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FTSE 100 retreats on energy losses; Melrose Industries the worst performer

Sagarika Jaisinghani and Ambar Warrick
Updated ·2-min read
FILE PHOTO: Signage is seen outside the entrance of the London Stock Exchange in London

By Sagarika Jaisinghani and Ambar Warrick

(Reuters) - London's blue-chip index sank on Wednesday with energy and healthcare stocks weighing the most amid weaker oil prices and some unwinding of bets on the timeline of a coronavirus vaccine.

The FTSE 100 <.FTSE> was down 1%, with oil heavyweights BP PLC <BP.L> and Royal Dutch Shell <RDSa.L> among the top drags as oil prices plummeted on a surprise rise in inventories.

Losses on the export-heavy FTSE 100 were more pronounced than those on the domestically-inclined midcap index <.FTMC>, owing to recent strength in the pound. [GBP/]

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Drugmaker AstraZeneca <AZN.L> also weighed, retreating further from record-high levels after the lead developer of its vaccine expressed caution on Tuesday about when it could be rolled out.

Turnaround specialist Melrose <MRON.L> tumbled 14% to the bottom of the FTSE 100 as it signalled it could cut jobs to combat the coronavirus-led downturn.

Sentiment was also dampened by a surge in global coronavirus cases past 15 million. Local stocks extended losses toward the end of the session, tracking a mixed open on Wall Street, though markets were watching for new U.S. stimulus measures.

"It's a pause before you find out what's next around the corner, (and eyes are now on) the United States to get some sort of extra stimulus package for that next leg higher," said David Madden, analyst at CMC Markets in London.

The FTSE 100 has rebounded sharply from a coronavirus-driven crash in March, but gains have slowed since May due to concerns over how a post-COVID-19 economic recovery will play out.

A Reuters poll found Britain's economy is expected to expand at its quickest pace in decades in the third quarter following a record plunge in the previous quarter, but a majority of the respondents said the outlook had not improved.

In domestic earnings-driven news, home improvement retailer Kingfisher <KGF.L> marked its best day since 1986, topping the FTSE 100 after it forecast a rise in underlying first-half profit.

(Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Subhranshu Sahu and Mark Heinrich)