FTSE 100 declines as oil prices rise, selling off continues in Asian markets as Sensex and Nifty remain volatile

Weak economic data drag US and European shares down as oil prices increase worries

Stuti Mishra
Wednesday 07 July 2021 06:23 BST
Crude prices spiked to a three year high of $77 per barrel as Opec+ failed to reach an agreement
Crude prices spiked to a three year high of $77 per barrel as Opec+ failed to reach an agreement (Getty)

London’s FTSE 100 ended lower on Tuesday after trading near the flatline for most of the session before the selling off intensified in the later hours.

The blue-chip index fell almost 1% by closing time, and ended 64 points down at 7,101, while BP and Royal Dutch Shell were two of the worst performing stocks on the index. Domestically focused FTSE 250 also lost 0.5 per cent.

US markets opened lower following weak economic data and oil prices continued to rise.

Weak economic data also dragged indices in other parts of the Europe, as France’s CAC and Germany’s DAX both fell around 1 per cent.

Global crude prices spiked to a three-year high of $77 per barrel as Opec+ failed to reach an agreement, and experts feared a further increase in prices.

Across the pond, the Dow Jones and S&P 500 fell on Tuesday, dragged by financial and energy stocks, while the Nasdaq edged higher to another closing record.

Data showed US services industry activity grew at a moderate pace, but missed expectations in June, likely restrained by labour and raw material shortages. A regulatory crackdown by Beijing also drove a selloff in shares of several US-listed Chinese firms, including Didi Global.

Meanwhile, most Asia-Pacific stocks fell on Wednesday following China’s scrutiny of the tech sector and rising concerns of crude prices. Japan’s Nikkei 225 traded around 1 per cent lower, while Hang Seng was 0.7 per cent down by noon. Shanghai Composite however recovered and traded marginally higher.

Indian indices also opened deep in the red, weighed down by poor cues from Asian and American peers, but oil prices, however, the Sensex recovered slightly after the first hour to enter the green territory. The index traded around 52,810 levels and the broader Nifty50 index was holding near the 15,800-mark.

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