The FTSE 100 dropped 0.7% to 5,849.73 today, plunging lower than the expected figure of 0.1%, as sluggish oil prices added pressure on oil firms and banks played spoilsport, as both sectors posted losses across Europe.
Crude oil for October delivery dropped 37 cents to $96.24 a barrel after dipping more than $2 on Monday, which, some opined, was due to speculation regarding a Strategic Petroleum Reserve release. BP PLC dropped 2.7%, BG Group PLC lost 2.5% and Royal Dutch Shell PLC dropped 0.8%.
Most metal prices also fell and added pressure on the UK miners. Vedanta Resources dropped 3.3%, Kazakhmys fell 2.8% and Rio Tinto lost 2%.
As last week’s US Fed stimulus faded out, banks also moved lower and followed a broader trend in Europe. Barclays fell 2.3%, Royal Bank of Scotland Group dipped 2.7% and Standard Chartered dropped 2.3%. Sector heavyweight HSBC Holdings lost 1.8%.
After Bank of America Merrill Lynch cut the stock to underperform from neutral, Dow Jones reported that Insurance firm Aviva plunged 4.8%.
Debenhams posted a 3.7% rise in underlying sales for the 10 weeks to September 1. The department store chain reported a 40% jump in online sales, but the shares remained flat at 99.2p.
JD Sports Fashion was 3.5p lower at 728p after it reported a big slump in half-year profits due to the struggling Blacks Leisure, which it acquired in January. JD expects Blacks Leisure to break even in the second half, while its core sports brands continued to do well.