UK stocks dip as Hurricane Sandy hits insurers and energy shares
BRITAIN’S leading shares dipped in low volume yesterday as concerns over the costs of Hurricane Sandy in the United States added to uncertainties about future corporate earnings.
Many investors were sticking to the sidelines ahead of a pick-up in the UK third-quarter earnings season this week, notably from the energy and banking sectors.
Insurers were among the big fallers on hurricane costs worries, while energy stocks were dented by a drop in crude prices as the storm saw refineries on the US eastern seaboard shut. Ai r line shares fell on concerns over flight disruptions.
The FTSE 100 closed down 11.61 points, or 0.2 per cent at 5,795.10 points, in volume of 60 per cent of the 90-day daily average, reflecting the absence of US trading interest with US stock markets closed because of the hurricane threat.
Blue chips rallied from earlier lows, however, with technical factors helping explain the index’s recovery, although overall caution remained.
The FTSE 250 index ended down 0.1 per cent, weighed by falls in Lloyds of London insurers such as Amlin, Hiscox, Catlin and Lancashire, which shed around 1.7 per cent on Hurricane Sandy exposure worries.
The impact of the storm provided another worry for investors already concerned about a relatively glum third-quarter earnings season, with a third of UK companies so far having missed expectations.
Weakness in oil major BP, down 1.6 per cent, before it kicks off the UK sector’s third-quarter reporting season today, accounted for almost five points, or about half of the blue chip index’s decline, according to Thomson Reuters data.