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The FTSE once again declined in value as the pound strengthened against the dollar and the US economy beat forecasts in what has been a busy day in financial markets.
Declines in London’s blue-chip index were largely led by energy companies as investors looked to minimise their holdings ahead of Wednesday’s OPEC meeting in Vienna, with oil production cuts on the agenda.
Brent crude is now $47.23 a barrel, a drop of 1.62%, which is half the decline experienced by WTI as it fell 3.31% and now sells at $45.27 a barrel.
Miners were also down, with Antofagasta retreating -3.91%, Fresnillo down -3.44$ and BHP Billiton down -3.03% while BP dropped -2.14% of its value and Royal Dutch was experiencing losses of -2.04%.
IG market analyst Joshua Mahony said: “As we approach [Wednesday’s] crucial OPEC meeting, the impact of an increasingly volatile crude market will play a significant part in dictating sentiment throughout financial markets.
“Despite an initial consensus, a deal feels as far away as ever, with members continuing to conduct an intricate game of political poker, utilising the media to further their cause.
“It is becoming increasingly evident that some of the more prominent OPEC members care more about holding on to market share than helping raise the price of oil. Hence, despite agreeing to a production cut, we have seen the likes of Saudi Arabia, Iraq and Iran all continue to raise production.”
Investors still arguably have one eye on the outcome of Italy’s referendum on Sunday, one which asks the populace to accept or reject a package of constitutional reforms put forth by Italy Prime Minister Matteo Renzi.
Such fears have not spread throughout Europe, though, as the Paris CAC gained 0.91%, the German DAX rose 0.36% and the Stoxx Europe 600 Index advanced 0.33%.
US stocks were fairly flat with the Dow Jones up a modest 0.11% and the NASDAQ up 0.17%.
Growth in the last quarter has been revised up to a 3.2% annual rate, from 2.9%, which demonstrates the American economy is performing even greater than what had been expected, with increased consumer spending, continued investment and exports all helping boost the GDP.