FTSE 100 retreats as US stimulus concerns weigh on European sentiment

The FTSE 100 retreated as concerns over a lack of urgency for US stimulus plans drove caution among traders.

Banking and commodity stocks helped to weigh down the UK index, as multinational companies drifted lower.

London’s top flight closed 94.5 points lower at 6,185.62 at the end of trading on Thursday.

Michael Hewson, chief market analyst at CMC Markets UK, said: “European stocks have given up some of their gains of the last few days, after US House Speak Nancy Pelosi pushed back on the prospect of a stimulus agreement plan in the near future.”

The major European markets fell less sharply than the FTSE but still closed lower on the back of growing stimulus concerns.

The German Dax decreased by 0.5%, while the French Cac moved 0.61% lower.

Across the Atlantic, the Dow Jones and S&P 500 were both steady nonetheless, as the US’ Thursday jobless claims figure came in below the one million mark for the first time in 21 weeks.

Mr Hewson said: “With the S&P 500 close to record highs it would appear that US politicians are tone deaf to the very real risks to the economy of their procrastination, at a time when their stock portfolios are looking quite healthy, and the US jobs market continues to show signs of improving.”

Meanwhile, sterling pushed higher, outperforming its counterparts amid optimism over a trade deal with the EU as politicians gear up to restart talks next week.

The pound rose 0.39% versus the US dollar at 1.308 and was up 0.09% against the euro at 1.106.

Oil and gas firms were weak after the IEA downgraded its outlook for oil demand due to concerns about the outlook for air travel.

The announcement, which caused oil prices to dip, put Royal Dutch Shell and BP under pressure after three days of decent gains.

The price of a barrel of Brent crude oil decreased by 0.18% to 45.07 US dollars.

In company news, Tui revealed the pandemic pushed it to a 1.1 billion euro (£995 million) loss in its third quarter after it halted holidays, sending shares lower.

It said widespread cost-cutting action helped limit losses as it pushed ahead with a plan announced in May to slash group costs by 30%, costing up to 8,000 jobs worldwide.

Shares in the company closed 22.6p lower at 344.7p on Wednesday.

Topps Tiles saw shares jump after it said a surge in DIY activity means it is set to post a modest profit for the current financial year.

It closed 4.8p higher at 48p after it told investors that like-for-like sales had jumped by 15.5% over the six weeks to August 8.

Elsewhere, funeral companies shot up in value after the competition watchdog abandoned some remedies it was considering to fix the sector because the coronavirus pandemic has made them unsafe to implement.

Dignity soared by 244p to 634p after the Competition and Markets Authority confirmed its initial findings from its analysis of the industry.

The biggest risers on the FTSE 100 were Flutter, up 335p at 12,325p, Persimmon, up 48p at 2,514p, GVC, up 14.6p at 800p, and Spirax-Sarco, up 190p at 10,950p.

The biggest fallers of the day were ITV, down 3.3p at 62.72p, IAG, down 8.9p at 204.4p, Phoenix, down 28.6p at 692.8p, and Natwest, down 4.6p at 114.75p.