July 2 2024: London’s FTSE 100 declined on Tuesday, with investors cautious ahead of the upcoming parliamentary elections, while rising oil prices helped limit the market’s overall decline.
The blue-chip FTSE 100 was down 0.5%, hitting its lowest level in over two weeks, while the mid-cap FTSE 250 fell 0.3% as of 0715 GMT.
Investors were hesitant to make significant bets before the UK parliamentary elections on Thursday, where the Conservatives are expected to be replaced after 14 years in power.
Additionally, prices in British shops rose at the slowest rate in almost three years last month, indicating cooling inflation. The latest key inflation reading showed that May inflation had fallen to the Bank of England’s 2% target for the first time in nearly three years. However, investors do not believe this will benefit Prime Minister Rishi Sunak in the upcoming election.
GSK and Sainsbury’s Impact
GSK shares slipped 1.2% after a Delaware judge denied the drugmaker’s request to appeal a ruling that allows over 70,000 lawsuits claiming that the heartburn drug Zantac caused cancer to proceed.
Sainsbury’s, Britain’s second-largest supermarket group, fell 1.5% after reaffirming its annual financial guidance despite reporting a 3% rise in first-quarter underlying sales. This decline in Sainsbury’s stock weighed on the personal care, drug, and grocery sector, which fell 1.3%.
Energy Sector Gains
Energy shares were the top gainers as oil prices held near two-month highs due to expectations of rising fuel demand during the summer travel season and potential U.S. interest rate cuts.
Heavyweight oil giant BP gained over 1%.
A job openings report is expected in the United States later in the day, alongside a speech by Federal Reserve Chair Jerome Powell.
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