Subdued European markets as FTSE dips amid energy sector weakness

The FTSE 100 spent much of Wednesday trading hovering in positive territory but closed a touch lower after weakness in energy, construction and luxury goods all acted as a drag.

It came amid a broadly cautious session, with investors taking a moment of reflection after volatile trading earlier this week.

The FTSE 100 moved 0.11%, or 8.18 points, lower to finish at 7,620.03.

Elsewhere is Europe, Germany’s Dax index was 0.24% higher for the day and the Cac 40 closed down 0.44%.

Michael Hewson, chief market analyst at CMC Markets, said: “European markets appear to be pausing for breath after the downs and ups at the start of the week.

“The Cac 40 has struggled due to weakness in the luxury sector after a profits warning from LVMH – this underwhelming update has seen the likes of Burberry, Richemont and Hermes all slide back.

“Energy has been a laggard along with oil prices which is weighing on the FTSE 100.”

Across the Atlantic, the main US market opened higher despite PPI (producer price index) inflation unexpectedly popping higher in September.

Meanwhile, sterling edged higher against the dollar despite a fall in gilt yields and experts at Goldman Sachs cutting their UK inflation forecast for 2023 and 2024.

The pound was up O.15% at 1.230 US dollars and was 0.09% higher at 1.159 euros at market close in London.

In company news, Travis Perkins tumbled after it said it will miss profit expectations this year in the face of “challenging conditions”.

The business told shareholders on Wednesday to expect an adjusted operating profit of between £175-195 million this year – significantly lower than the £236 million and £250 million that analysts had previously said they think the business would make.

Shares in the firm closed 49.6p lower at 756p in response to the profit warning.

As a result, rival Howden Joinery was one of the worst performers on the FTSE 100 as concerns over the sector fed through.

Recruiter PageGroup also closed lower on Wednesday as it also reduced its profit guidance.

The company said earnings were due to be impacted by firms reining in pay offers and job seekers increasingly turning down new roles amid economic uncertainty.

Shares closed 9.8p lower at 414.2p after it also reported a 10.5% drop in group-wide gross profit over the three months to September 30.

Elsewhere, public transport operator FirstGroup was in the green after it was boosted by a strong summer of travel.

The bus and rail firm said trading was slightly ahead of expectations during the first half of the financial year despite ongoing cost-of-living pressures and improved its profit outlook as a result. Shares improved by 5.4p to 151.9p.

The price of oil had its second day of decline after the conflict in Israel had originally provided a lift to prices.

A barrel of Brent crude fell by 1.77% to 86.1 US dollars (£69.98) as markets were closing in London.

The biggest risers on the FTSE 100 were Imperial Brands, up 32p to 1,755p, M&G, up 3.25p to 201.1p, Unite Group, up 14.5p to 927p, Rightmove, up 8.8p to 592.8p, and United Utilities, up 14p to 974.2p.

The biggest fallers were Howden Joinery, down 33.8p at 675.2p, Convatec, down 8.4p at 206.2p, JD Sports, down 5.55p at 138.6p, Smith & Nephew, down 36.6p at 944.2p, and Burberry, down 58.5p at 1,777p.