UK's FTSE 100 hits over three-week low as banks, energy stocks sag
FTSE 100 Performance and Sector Highlights
June 9 (Reuters) - Britain's blue-chip FTSE 100 hit its lowest since mid-May on Tuesday, bogged down by losses in heavyweight lenders HSBC and Standard Chartered, while energy giants also lost ground amid declining oil prices as investors monitored the Middle East conflict.
The blue-chip FTSE 100 index closed 1.4% lower at 10,227.33 points, its weakest close since May 15. The midcap FTSE 250 also shed 0.8%.
Sector Movements
Energy Sector
• Heavyweight energy stocks dropped 2.2% as crude oil prices slipped more than 3%. On Monday, Israel and Iran halted direct attacks on each other after an appeal by U.S. President Donald Trump.
BP Leadership Changes
• Energy giant BP said company veteran Gordon Birrell will lead its upstream unit and Richard Harding will serve as interim head of downstream. Its shares closed 3% lower, tracking the drop in oil prices.
Banking Sector
• Asia-exposed lenders Standard Chartered and HSBC slipped 6.3% and 4.4%, among the biggest drags on the blue-chip index.
Impact of China's Outbound Direct Investment Regulation
• JPMorgan analysts said in a note that the impact of China's new Outbound Direct Investment regulation would be more negative for UK, Asian and Swiss banks than previously expected.
Other Notable Movers
• Drugmaker GSK lost 0.5% after agreeing to buy U.S.-listed cancer drug developer Nuvalent for $10.6 billion.
• Venture capital firm Molten Ventures gained 16.1% after announcing annual results. Fever-Tree Drinks gained 5.1% after the carbonated mixer supplier said it is confident of meeting full-year market expectations for revenue and core profit and announced an increase in share buybacks.
Macroeconomic Factors
Inflation and Interest Rate Expectations
• Inflation concerns, stemming from higher energy costs due to the Iran conflict, have had investors pricing in the likelihood of a 25 basis point interest rate hike by the Bank of England in September, according to LSEG-compiled data.
(Reporting by Johann M Cherian and Shashwat Chauhan in Bengaluru)
