FTSE 100 retreats amid weak metal and oil prices

The FTSE 100’s record-breaking run stalled on Wednesday with falling metal and oil prices weighing on the blue chip index.

The FTSE 100 index closed down 74.52 points, 0.7%, at 10,048.21.

The FTSE 250 index ended up 88.92 points, 0.4%, at 22,880.81, and the AIM All-Share index closed up 2.08 points, 0.3%, at 781.58.

AJ Bell analyst Russ Mould noted the FTSE 100’s fall came amid “murmurings about the fate of Greenland and lower oil and precious metals prices”.

“As well as pledging to turn over between 30 and 50 million barrels of Venezuelan oil to the US following the weekend strikes on the country, prompting concern about crude oversupply and pressuring prices, President Trump is looking at options to acquire Greenland – with military action apparently not ruled out,” Mr Mould said.

In a post on his Truth Social platform, Mr Trump said the oil would be sold at market prices and that the proceeds would be controlled by him as president to ensure they were used “to benefit the people of Venezuela and the US”.

Brent oil traded at 60.37 dollars a barrel at the time of the London equities close on Wednesday, down from 61.59 dollars late Tuesday.

David Morrison, senior market analyst at Trade Nation, noted: “President Trump’s pledge to restructure Venezuela’s oil industry and encourage US companies to rebuild infrastructure has raised expectations of higher output over time.

“As global demand growth continues to slow, the prospect of increased supply acts as a headwind for prices, regardless of geopolitical headlines. Until that balance shifts, oil is likely to remain under pressure.”

Shares in BP and Shell fell 3.4% and 3.3% respectively.

Miners also fell back as metals price pared recent strong gains.

Gold was lower at 4,458.54 dollars an ounce at Wednesday’s close, against 4,485.16 dollars on Tuesday, while the price of silver fell 3.8% and copper ebbed 3.0%.

Reflecting this, Antofagasta fell 4.4%, Fresnillo dropped 4.8% and Endeavour Mining dipped 1.7%.

The simmering geopolitical tension saw gains for defence contractors BAE Systems, up 2.4% and Babcock International, up 3.8%.

Elsewhere, economic data showed UK construction firms experienced another sharp drop in activity in December, although the rate of decline eased, according to survey results published by S&P Global.

The seasonally adjusted S&P Global UK construction purchasing managers’ index rose to 40.1 points in December from 39.4 in November, but was below the expected 42.3 points.

The PMI remained below the 50.0 neutral mark separating growth from contraction for the 12th consecutive month, with its second-lowest reading since May 2020.

Tim Moore, S&P Global Market Intelligence’s economics director, commented: “UK construction companies once again reported challenging business conditions and falling workloads in December, but the speed of the downturn moderated from the five-and-a-half-year record seen in November. Many firms cited subdued demand and fragile client confidence.”

Nonetheless, listed housebuilders were in demand as bond yields fell on hopes of lower UK interest rates this year.

The yield on UK 10-year gilts fell markedly to 4.41% on Wednesday from 4.49% on Tuesday, and briefly dipped below 4.40% to levels last seen on the day of November’s budget.

Property companies Land Securities and LondonMetric rose 3.2% and 3.8% respectively, while housebuilders Barratt Redrow and Persimmon climbed 3.3% and 2.8%.

The pound was quoted at 1.3472 dollars at the time of the London equities close on Wednesday, down from 1.3500 dollars on Tuesday.

The euro was slightly lower at 1.1685 dollars from 1.1689 dollars.

Figures showed eurozone inflation eased slightly at the end of 2025, with the annual rate falling to 2.0% in December from 2.1% in November, according to a flash estimate published by Eurostat.

The print came in line with the FXStreet-cited consensus and would be within the European Central Bank’s 2% inflation target.

In European equities on Wednesday, the Cac 40 in Paris closed up 0.1% and the Dax 40 ended 0.9% higher in Frankfurt, soaring past 25,000 for the first time.

Stocks in New York were mixed at the time of the London close on Wednesday.

The Dow Jones Industrial Average was down 0.3%, the S&P 500 was 0.1% higher and the Nasdaq Composite advanced 0.4%.

The yield on the US 10-year Treasury was quoted at 4.15% on Wednesday, narrowed from 4.20% on Tuesday. The yield on the US 30-year Treasury was at 4.82%, trimmed from 4.88%.

US data on Wednesday was mixed with a strong ISM services PMI print offset by a surprise drop in job vacancies.

The figures come ahead of Friday’s US jobs report, which is likely to determine whether the Federal Reserve cuts interest rates in January, or not.

Morgan Stanley estimates headline and private payrolls rose 75,000 in December re-accelerating from its summer slump.

“We think some of the weakness in summertime and some of the recent rebound are exaggerated, but the positive reading still probably lessens immediate labour market concerns at the Fed,” the broker said.

“However, our 4.6% forecast for the unemployment rate keeps the Fed on track for a January cut,” Morgan Stanley believes.

“If we are wrong, labour demand bounces upward, and the unemployment rate does fall, there is less impetus for the Fed to cut, as we expect, in January,” the broker added.

Back in London, Relx rose 2.1% as JPMorgan highlighted its attractions.

“We believe Relx’s ‘AI glass’ is not even half full, rather it is overflowing and that the pullback in the share price represents a compelling buying opportunity,” analyst Daniel Kerven said in a research note.

Meanwhile, Vodafone climbed 2.8% as Berenberg upgraded to “buy” from “hold”, noting the potential for share buybacks from forecast strong increases in free cash flow.

But Diageo shares slipped 4.1% as Bloomberg reported a Kenyan beer distributor lodged a lawsuit seeking to block the spirits maker’s planned 2.3 billion dollars sale of East African Breweries to Japan’s Asahi Holdings.

The biggest risers on the FTSE 100 were Babcock International, up 53.00 pence at 1,441.00p, LondonMetric Property, up 7.10p at 196.00p, Segro, up 24.40p at 743.60p, Barratt Redrow, up 12.30p at 385.00p and IMI, up 82.00p at 2,616.00p.

The biggest fallers on the FTSE 100 were Fresnillo, down 178.00p at 3,500.00p, Antofagasta, down 155.00p at 3,387.00p, NatWest, down 28.20p at 632.40p, Diageo, down 67.00p at 1,577.00p and Entain, down 28.20p at 743.60p.

Thursday’s local corporate calendar has trading statements from hot snacks seller Greggs, clothing and homewear retailer Marks & Spencer Group and grocer Tesco.

Thursday’s global economic calendar has eurozone unemployment and PPI figures, US weekly jobless claims data and the Halifax house price report in the UK.