FTSE 100 drops as supply issues continue while Wall Street improves

·3-min read
Looking across to the square mile financial district. London stocks fell back on Friday (John Walton/PA) (PA Archive)
Looking across to the square mile financial district. London stocks fell back on Friday (John Walton/PA) (PA Archive)

The FTSE 100 dropped as supply and staffing issues continue to weigh on UK firms.

London markets stumbled out of the blocks on Friday morning after weakness in the Asian markets and continued to stall amid the fuel shortages.

London’s top flight closed 59.35 points, or 0.84%, lower at 7,027.07 on Friday.

Danni Hewson, AJ Bell financial analyst, said: “Having spent an hour enjoying the charms of nearby petrol stations, it doesn’t surprise me at all to see that that week’s big winner on the FTSE 100 was Royal Dutch Shell and BP’s not done too shabbily either.

“The question undoubtedly being asked by anyone trying to get a handle on these supply issues is what’s next?

“We wanted the economy to run hot but right now Goldilocks will be eyeing her thermostat with trepidation and hoping her fixed tariff has a few months more to run. And over on Wall Street the pot’s bubbling nicely too.”

The US markets opened slightly higher despite seeing a rise in inflation for August as lawmakers seek to once again push through a vote on the infrastructure bill.

In Europe, the other key markets also drifted lower albeit with slightly shallower falls.

The German Dax decreased by 0.68% and the French Cac moved 004% lower.

Meanwhile, sterling made gains against the dollar as the US greenback took a breather after reaching a peak for the year so far on Thursday.

The pound was up 0.17% versus the US dollar at 1.356 and was up 0.19% against the euro at 1.169.

In company news, AO World shares plunged after the online white goods retailer warned its growth was being hit by the nationwide shortage of delivery drivers and disruption in the global supply chain.

Bosses said “challenging market dynamics” meant sales volumes in the UK and Germany were lower than expected in the second quarter.

Shares in the company plunged by 52.8p to 164.6p.

Elsewhere, Darktrace shares slid after three early investors in the company sold around 25 million shares.

KKR, Balderton Capital and Summit sold shares at a placing of 750p each, representing a 9% discount of the firm’s value at the end of Thursday, after seeing its value triple since its float in April.

Darktrace shares finished down 26p at 794p.

Ready meal delivery business Parsley Box collapsed further after warning that supply chain issues are hindering its growth, meaning sales will fall below previous targets.

Shares slid by 26p to 35p on Friday, having already suffered a significant plunge in value in the previous session.

JD Wetherspoon climbed by 26p to 1.069p despite revealing a 39% dive in revenues for the past year as bosses highlighted an improvement in sales over the past nine weeks.

The price of oil softened on the back of speculation that OPEC+ might consider increasing production more than planned in a bid to keep a lid on prices.

Brent crude increased by 0.34% to 78.58 dollars per barrel.

The biggest risers on the FTSE 100 were IAG, up 9.52p at 188.02, Intercontinental Hotel Group, up 169p at 4,925p, Whitbread, up 90p at 3,406p, and Burberry, up 45p at 1,860p.

The biggest fallers of the day were Evraz, down 23.6p at 570.8p, Hikma, down 83p at 2,367p, Scottish Mortgage Investment Trust, down 43.5p at 1,384.5p, and B&M, down 17.4p at 573.2p.

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