London's FTSE 100 falls as oil majors weigh; voters head to polls
Market Performance and Election Impact
May 7 (Reuters) - Britain's FTSE 100 dropped on Thursday, as losses in oil majors Shell and BP and defence firms weighed, while Britons headed to the polls in local and regional elections.
FTSE Index Movements
The blue-chip FTSE 100 index closed 1.6% lower at 10,276.95 points after surging more than 2% in the previous session. The midcap FTSE 250 gained 0.2%.
Political Developments
• The elections could deal a huge blow to Prime Minister Keir Starmer's Labour Party, renewing scepticism about his ability to govern. They could also signal the beginning of the end of Britain's traditional two-party system.
Economic Indicators
• A recent survey showed that in April, British builders saw one of the biggest month-on-month jumps in cost inflation.
Currency and Global Factors
• The pound <GBP=> rose against the dollar on hopes that an end to the U.S.-Iran conflict was near, pressuring multinational firms that earn most of their revenue overseas.
Earnings Season and Market Sentiment
• With earnings season in full swing, markets are assessing consumer demand and any economic impact from the Middle East conflict.
Company Performances
Oil Majors
Shell and BP
• Shares of oil major Shell dropped 2.9% despite reporting its highest quarterly profit in two years and raising its dividend. Rival BP fell 2.6%, as oil's slide below $100 weighed on its stock. [O/R]
Defence Firms
BAE Systems
• Shares of BAE Systems were down 4.7%, among the biggest drags on the FTSE 100, after the defence firm maintained its full-year outlook.
Other Notable Movers
InterContinental Hotels Group
• InterContinental Hotels Group rose 1.5% after topping quarterly room revenue estimates as its U.S. business rebounded.
Autotrader Group
• Autotrader Group gained 4.1% after a source told Reuters that activist investor Palliser Capital had built an up to 2% stake in the company.
Helios Towers
• Helios Towers jumped 14.3%, lifting the mid-cap index, after the mobile tower operator raised its annual profit forecast.
RELX
• RELX dropped 6.2% after Morgan Stanley downgraded its rating on the information group to "equal-weight" from "overweight". Shares of the company were also trading ex-dividend on Thursday.
(Reporting by Medha Singh and Shashwat Chauhan in Bengaluru; Editing by Diti Pujara and Alex Richardson)
