FTSE dragged back by oil price plunge and US inflation

London stocks finished the session firmly lower as positivity regarding a better-than-expected economic recovery in late 2021 quickly dissipated.

Worries over the ongoing conflict in Ukraine and plunging oil prices pulled the City’s main indexes to losses and these were exacerbated by dramatic inflation figures from the US which helped to spook traders.

The FTSE 100 ended the day down 63.07 points, or 0.83%, at 7,515.68 points.

It was the latest session where downbeat sentiment was more muted in London than other important markets due to broadly robust commodity firms.

“The first quarter of 2022 has been a rough one for investors to navigate,” commented Danni Hewson, financial analyst at AJ Bell.

“Volatility has been the name of the game as levers were pulled to curb rising prices, and war undermined many of those efforts.

“Of the 10 main global indices only London’s blue-chip FTSE 100 has emerged from the last three months in better shape than it went in, boosted by miners and energy giants cashing in on runaway commodity prices.”

The price of oil slid after OPEC+ stuck to its production targets despite calls for the body to increase output more than originally planned.

Brent crude tumbled by 4.59% to 108.24 US dollars per barrel when the London markets closed.

The fall resulted in declines for oil majors Shell and BP.

Across the Channel, the Cac was down 1.21% and the German Dax decreased 1.31% by the end of the session.

On Wall Street, the Dow Jones and S&P both sank after the personal consumption price index, an inflation measure valued by the Federal Reserve, jumped to 6.4% for the year to February, compared with a January reading of 6.2%,

Meanwhile, sterling rose against the euro due to the upgraded GDP revision for the three months to December but could not match a buoyant dollar.

The pound decreased by 0.13% against the dollar to 1.314, but rose 0.17% against the euro to 1.185.

In company news, Brewin Dolphin soared in value after the wealth manager agreed to be bought by the Royal Bank of Canada in a £1.6 billion deal.

The businesses said they had reached an agreement that will see RBC paying 515p per share for the London-based business.

Shares jumped by 194p to 512p as a result of the more-than-60% premium tabled.

Hostelworld shares made gains after it said bookings have “picked up” following a “challenging year” hampered by pandemic travel restrictions.

The Dublin-based online bookings platform saw shares move 3.8p higher to 77p after it reported a 10% increase in revenues to 16.9 million euros (£14.3 million) for 2021 compared with the previous year.

Retailer Next dropped on Thursday after Deutsche Bank slashed its target price for the business by 17%, although it still suggested investors buy the stock.

Next closed 242p lower at 6,032p after the German banking giant trimmed its valuation.

The biggest risers on the FTSE 100 were Pearson, up 11.4p at 750.6p, Severn Trent, up 38p ay 3,078p, Prudential, up 10.5p at 1,134p, Halma, up 21p at 2,510p, and Intermediate Capital Group, up 14.5p at 1,785.5p.

The biggest fallers of the day were Royal Mail, down 16.5p at 329p, WPP, down 50p at 1,003p, ABF, down 68.5p at 1,662p, Next, down 242p at 6,032p, and Kingfisher, down 9.6p at 255.4p.