The FTSE 100 experienced a downturn on Tuesday, influenced by the performance of multinational companies susceptible to currency fluctuations and a decline in oil prices. Notably, AstraZeneca decreased by 0.8%, while Unilever and BAE Systems saw reductions of 1% and 0.4% respectively, as the stronger pound adversely affected overseas earnings when converted into sterling. Additionally, major oil companies, Shell and BP, fell by 0.7% and 0.8% respectively, as crude oil prices faced downward pressure due to the anticipated increase in supply in light of the upcoming OPEC+ meeting, coupled with optimism about resolving the conflict in Gaza.
On the economic front, UK shop price inflation accelerated to 1.4% in September, marking its highest level in 19 months. This was primarily driven by increased costs of DIY and gardening products, though items such as laptops and back-to-school supplies saw price reductions. The British Retail Consortium (BRC) has cautioned that forthcoming packaging taxes may add additional financial pressure. Furthermore, data from the Office for National Statistics (ONS) confirmed a 0.3% increase in the UK's GDP for the second quarter, with the annual growth rate revised upwards to 1.4% from the previous estimate of 1.2%. Despite the decline, the FTSE 100 is on track to achieve a 6% gain for the quarter, its most robust performance since 2022, outperforming its European counterparts.
