Highlights
- FTSE 100 ends 31 points lower at 10,606
- Wall Street higher after inflation boost
- Tullow tanks on tax setback
- Greggs and SAGA lead FTSE 250
Footsie ends on a bum note
What was that all about? The FTSE 100 capped a weak finish to September, with selling continuing into the final session of the month. After a bright start, the index ended down 31 points at 10,606.
"It has been a tough month for European stocks," said IG.
Higher inflation and a US Federal Reserve raising rates have left Europe out of favour, the analyst added.
Without big tech stocks to prop them up, London and its European peers lack support.
A sustained fall in oil prices and softer Fed rhetoric may be needed before sentiment turns.
FTSE 100 slips into the red despite cooler US inflation
The FTSE 100 has turned negative in the afternoon session, giving up a strong start that saw it open around 70 points higher.
Gains on Wall Street failed to lift London, even after a cooler-than-expected US inflation reading.
The personal consumption expenditures (PCE) index, the Federal Reserve's preferred inflation gauge, rose 3.4% in the year to August, below forecasts of 3.7%.
In New York, the S&P 500 gained 0.3% and the Nasdaq Composite added 0.5%, while the Dow Jones Industrial Average was flat.
Traders cut bets on a US rate rise in October to roughly a coin flip, from more than 70% a day earlier.
New York Fed president John Williams said there was no need for urgency to raise rates.
Separate ADP data showed US private employers added 90,000 jobs in September, up from 36,000 in August.
Rising bond yields and oil in the mid-$90s a barrel, with the Iran war in its seventh month, continue to weigh.
Footsie flagging
The FTSE 100 has given up most of its early gains and is now trading roughly flat after a strong start.
The mood soured as US stock futures slipped, with Treasury yields climbing to fresh multidecade highs.
Futures on the Dow Jones and S&P 500 dipped just below the flat line, while Nasdaq contracts edged into the red.
Oil steadied in the mid-$90s a barrel as the war in Iran enters its seventh month, keeping inflation worries alive.
Traders have cut bets on a Federal Reserve rate rise in October to about 42%, from more than 70% a week ago, after New York Fed president John Williams said there was no urgency.
This afternoon's PCE inflation figures are the next hurdle, with the core reading expected to hold at 3.3%.
Micron reports after the US close.
FTSE 100 holds gains but loses its early fizz
The FTSE 100 was up 23 points, well off its session high as the early enthusiasm faded.
Brent crude slipped back below $100 a barrel overnight on signs of improved Middle East supply and a big release of US emergency reserves.
That eased inflation nerves and pulled bond yields back from multi-decade highs. Oil and gas stocks fell, while consumer-facing shares gained.
Utilities clawed back some of Tuesday's losses, which followed Andy Burnham's unveiling of GB Grid, a state-backed plan to invest in the electricity network.
Greggs was in demand after an upbeat update. AJ Bell's Dan Coatsworth said the baker had shown it "has not gone stale like a two-day-old sausage roll".
The next test comes this afternoon with the US PCE inflation figures, the Federal Reserve's preferred gauge.
Tullow sinks 44% on Ghana tax defeat
Tullow Oil shares crashed 44% to 11.44p after the company lost an international arbitration over a $196.5 million tax bill in Ghana.
The tribunal ruled that the tax claim, relating to insurance payouts between 2016 and 2019, did not breach Tullow's petroleum agreements.
Penalties of 100% also fall outside those protections, which could double the bill to around $393 million.
Peel Hunt called the ruling a significant disappointment, as it removes a key legal argument Tullow had relied on.
The broker noted that the Ghanaian government remains supportive of the oil sector, which may leave room for negotiation.
It kept its 'buy' rating and 24p target, now more than double the share price. Tullow's hopes now rest on diplomacy rather than the small print.
Strong start
The FTSE 100 kicked off with a better-than-expected 70-point gain, with a mixed assortment of stocks on the leaderboard. SSE led the way, followed by Marks & Spencer and Antofagasta.
The morning's biggest faller, down 34%, was Tullow Oil, which received a major setback in its Ghana tax arbitration case, worth almost £200 million.
Greggs and SAGA both advanced 7% in early trading after upbeat updates.
Bright start predicted
The FTSE 100 is set to open 60 points higher, helped by a pullback in global bond yields.
The yield on the 30-year US Treasury slipped to around 5.56% after touching 5.62% on Tuesday, its highest level since 2002.
Asian markets were mixed as investors waited for US inflation figures later today.
Japan led the way, with the Nikkei 225 up 1.5% as chip stocks rallied and SoftBank Group jumped 6%.
Hong Kong's Hang Seng slipped 0.3% and South Korea's KOSPI fell 0.4%.
In Australia, inflation rose to 4% in August, a day after the central bank lifted interest rates to a 15-year high of 4.6%.
Brent crude steadied at around $103 a barrel after a sharp fall on Tuesday.
The main event is the August personal consumption expenditures (PCE) price index, the Federal Reserve's preferred inflation measure.
Nobody expects it to show inflation anywhere near the Fed's 2% target; the only question is how far off it will be.
