The FTSE 100 declined on Tuesday as banks dragged the most and elevated oil prices weighed on the market. Gains in defensive sectors cushioned the fall, while pay data raised the prospect of a Bank of England rate hike.
The FTSE 100 fell 0.8% to 10,680.25 points by 1006 GMT on Tuesday. Banks led the decline as elevated oil prices continued to weigh, according to Reuters.
The midcap FTSE 250 lost 1% and was on track for its biggest one-day fall in nearly two weeks.
Banks and industrials drag
Banks fell nearly 2% to an over four-month low. HSBC, Lloyds and NatWest fell between 1.6% and 2.3%.
Industrial stocks also struggled. They lost 1.8%, with Diploma and Rolls-Royce down 3.3% and 1.7% respectively. Bunzl slipped 2.2% despite a 3.7% rise in third-quarter revenue and unchanged annual forecasts.
Meanwhile, oil prices advanced, with Brent reaching a five-month high of $111.05 a barrel.
Defensive sectors and rate expectations
Investors turned to sectors considered traditionally defensive. Healthcare rose 0.5%, and the personal care, drug and grocery sector added 0.3%.
However, data showed a modest rise in the pace of pay growth for British workers, with hints of a small recovery in the jobs market. That could bolster the case for a Bank of England interest rate hike next month, pressuring rate-sensitive midcaps. Anglo American dipped 1.6% after it maintained its 2026 copper production guidance despite a 5% drop in third-quarter copper output.
Ocado rose 6.6% to top the FTSE 250 after J.P. Morgan raised its price target to 460 pence from 290 pence. Investors will watch UK inflation and retail sales figures this week as markets enter another corporate earnings season.
Source: Investing.com (Reuters)
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