The FTSE is holding up this morning unlike its European peers, which are all trading in the red. The London index is being sustained by a rally by BP after the oil giant reported flat earnings as a rise in the company’s output balanced out a decline in the oil price during the second quarter.
Utility firm Centrica slipped to the bottom of the index as the departure of the company’s chief executive triggered a 10% decline in share price. The market’s reaction to Centrica’s Iain Conn stepping down has been magnified by investors’ concerns that the company will continue to lose money as it did in the first six months this year, when it reported a £446 million pre-tax loss.
The pound is beginning to look scarily cheap, trading down at $1.2161 with investors positioning themselves for a rocky few months before the next Brexit deadline. On current count sterling is having the worst month since October 2016 as it has lost 4.3% so far since the beginning of the month. Investors’ main concern remains a hard no-deal Brexit which has the potential to pull the economy into chaos.
Oil has been rising for the last four trading sessions and is trading up 0.85% this morning as traders are betting that an expected Fed rate cut later this week would give the US economy a shot in the arm and so boost domestic oil demand.