Energy shares drag FTSE 100 lower; earnings, economic data in focus

The UK’s FTSE 100 on Monday extended losses from last week as energy shares tracked oil prices lower, while investors looked ahead to the start of the earnings reporting period and a slew of economic datasets this week.

The blue-chip FTSE 100 fell 0.2 percent after it started the year on a grim note last week.

Heavyweight oil and gas shares led losses among sectors, dropping 1.5 percent to a three-week low after oil prices fell more than 1 percent on sharp price cuts by top exporter Saudi Arabia and a rise in OPEC output.

READ: Oil slips as higher OPEC supply, Saudi price cuts offset Mideast worries

UK stocks finished the first week of 2024 lower, with FTSE 100 falling by the most since November and the FTSE 250 by the most since early October, as markets scaled back on early rate cut bets.

Goldman Sachs expects the FTSE 100 to rise to 7,900 over the next 12 months, representing a roughly 3 percent upside for UK stocks from current levels.

Shell slipped 1.9 percent to the bottom of FTSE 100 as it flagged impairment charges of about $2.5 billion to $4.5 billion for the fourth quarter, mainly related to the Singapore refining and chemicals hub the oil major is looking to sell.

“Investors are focusing on the fact that Shell warned that profits from trading oil products and chemicals would be lower resulting in a loss in that division,” Victoria Scholar, head of investment, interactive investor, said.

CMC Markets soared 23.6 percent to hit a four-month high after the online trading platform raised its full-year operating income forecast, while rival Plus500 rose 7 percent.

These stocks drove the midcap index FTSE 250 0.3 percent higher.

READ: UK inflation falls far more than expected, lowest since Sept 2021

U.S. earnings season kicks off later this week with results from Wall Street heavyweights including JPMorgan and Bank of America, while UK’s focus will be on updates from supermarkets like Marks and Spencer Group, Sainsbury’s, and Tesco.

U.S. inflation and UK’s GDP data will also be on investors’ radar end of the week.