FTSE 100 finishes lower, oil falls on demand fears, USD at 2-week highs By Investing.com

Key points

• FTSE 100 closing price of 6,698.30, down 0.4%
• Rolls-Royce (LON:RR) and airlines weak
• Oil names fall on decline in crude
• Bitcoin down to $55k but off worst levels

By Samuel Indyk

Investing.com – The FTSE 100 closed lower on Monday, led lower by travel stocks which fell for the second day this week as hopes of European travel this summer begin to fade. Germany announced further strict lockdown measures over the Easter weekend which will see grocery stores closed for all but one day between April 1st-5th in an attempt to curb the virus.

From the UK, new legislation is to be voted on this week that would see people issued with a £5,000 fine were they to travel abroad without good reason. Under current restrictions, the earliest date people in England could go abroad for a holiday would be May 17th.

British Airways parent IAG (LON:ICAG) was again one of the worst performers in the blue-chip index alongside jet engine manufacturer Rolls-Royce.

Energy companies were also weak as WTI and Brent crude futures both tumbled amid the latest Covid curbs which could weigh on demand.

“Global travel is still looking like it could be a while away,” said Matt Stanley of Star Fuels in Dubai.  

BP (LON:BP) and Royal Dutch Shell (LON:RDSa) shares both closed lower while midcap energy names Tullow Oil (LON:TLW) and Premier Oil (LON:PMO) propped up the FTSE 250.

GBP was weak as GBP/USD dropped back below 1.3800 to its lowest level since February 9th. GBP has benefitted from expectations of a faster recovery than its peers amid a rapid vaccination programme. However, fears over a lack of supplies of ingredients for the AstraZeneca PLC (LON:AZN) (NASDAQ:AZN) jab stemming from a potential EU export ban has weighed on GBP. Separately, the USD has jumped against most of its peers with the Dollar index at two week highs above 92.00.

Bitcoin fell below $53,000 at one stage on Tuesday but posted a small recovery to trade above $55,000. Yesterday, the Fed Chair Jerome Powell called cryptocurrencies a ‘speculative asset’ and added that they were not a useful store of value.

Looking ahead

The UK’s Office for National Statistics will announce its latest inflation figures tomorrow morning. CPI is expected to increase to 0.8% from 0.7% last month. Tomorrow is also PMI day with French, German, Eurozone and UK flash PMIs released throughout the morning.