FTSE 100 dragged lower by drop in commodities and stable pound

Weakness in the commodities markets weighed on London’s blue-chip index on Tuesday, while a stable pound put further pressure on top-flight shares.

The FTSE 100 closed 71.65 points, or 1.06%, lower at 6,701.59.

“Stock markets in Europe are mixed as we approach the close,” said David Madden, market analyst at CMC Markets UK.

“Investors are still cautious about the health of the global economy, and some eurozone indices have recouped some of the ground lost yesterday. The FTSE 100 is paying the price for its overreliance on commodity-related companies.”

Declines in copper, palladium and platinum hit Glencore, which was down 4.75p at 288.2p while lower oil prices weighed on BP, down 11.3p at 497.3p, and Royal Dutch Shell ‘A’ shares, down 55.5p to 2,266.5p.

Oil prices dropped as growing US shale output stoked fears of oversupply.

A barrel of Brent crude was trading 2.57% lower at 57.24 US dollars.

“Reports of growing inventories and expectations of record output from the US and Russia, combined with fears of reduced demand as the outlook for the global economy deteriorated, has put the bears firmly in control,” said Fiona Cincotta, senior market analyst at City Index.

“Whilst Opec did agree to cut global production by as much as 1%, these cuts will not take effect until next month. However, with the demand outlook worsening, there is a good chance that production cuts just don’t go far enough.”

Adding to the pressure on the FTSE was a stable pound, which appeared to shrug off reports that the Cabinet has ramped up its plans for a no-deal Brexit amid uncertainty over the fate of a proposed deal.

Sterling was 0.08% higher against the euro at 1.112 and 1.14% up on the dollar.

Mr Madden said: “Brexit uncertainty is still a factor, but given that Prime Minister May has deferred the vote on the deal until the middle of January, some of the downward pressure on sterling might be removed in the near-term.”

In London, AIM-listed Angling Direct reeled in rising sales in the last quarter as it profited from record Black Friday sales.

The fishing retailer posted a 31.5% rise in sales to £14.6 million in the four months to November 30, while in-store like-for-like turnover increased by 7.2% to £4.96 million.

Shares were down 1.5p at 80.5p

Meanwhile, the troubled Telit Communications said that the Financial Conduct Authority has expanded the scope of its ongoing investigation into the company.

In March, the FCA launched an investigation into “the timeliness of announcing certain matters included in Telit’s interim results”, which were published last August.

Telit – which manufactures “internet of things” modules and platforms – said the investigation is now looking into the “accuracy of earlier announcements” made by the company.

Telit shares were down 6.3p at 125.8p.

In Europe, the French Cac dropped 0.95% and the German Dax was down 0.29%.

The biggest risers on the FTSE 100 were Randgold Resources up 212p to 6,886p, Standard Life Aberdeen up 6.15p to 247.05p, Easyjet 26.5p to 1,078p and Johnson Matthey up 63p to 2,751p.

The biggest fallers on the FTSE 100 were National Grid down 76.6p at 758.7p, NMC Health down 106p to 2,804p, Shire down 161.5p to 4,371p and Antofagasta down 26p to 770p.