London markets slip as BP share slump drags on FTSE 100

The FTSE 100 slumped into the red on Tuesday as oil giant BP acted as a drag.

Sentiment started positive in early trading but turned sour throughout the session, as housebuilders and retailers also weakened.

BP was one of the day’s significant fallers after if it warned of an impairment charge of up to two billion US dollars (£1.6 billion) in its second quarter.

The group said it is bracing for a hit linked to “post-tax asset impairments and associated onerous contract provisions”, including previously announced moves to review its refining operations in Germany.

AJ Bell investment director Russ Mould said: “A teaser ahead of second-quarter results later this month from BP suggests they won’t be a winner.

“The major issue is a big hit to refining margins, reflecting both market dynamics but also operational issues for the company.”

Shares in the oil major fell by 4.3% to 454.25p as a result and put heavy downward pressure on the FTSE 100.

London’s top index finished 53.68 points, or 0.66%, lower to end the day at 8,139.81.

Elsewhere in Europe, sentiment drifted after US Federal Reserve chairman Jerome Powell failed to provide clear signals for interest rate cuts in the near future in a speech to congress.

The Cac 40 in France ended 1.56% lower and the Dax index was down 1.34% at the close.

Stateside, the US tech rally continued, helping push the Nasdaq 100 index to another record high.

In company news, recruiter PageGroup was firmly in the red after it warned over annual earnings and revealed further cuts to its workforce in the face of weaker activity in the global jobs market.

The group said that gross profits fell 12% on a constant currency basis to £224.3 million in the three months to the end of June and worsened through the quarter.

Investors were knocked by the update, with shares dropping by 3.98% to 405.8p.

Mulberry shares made positive strides on Tuesday after the luxury handbag maker ousted under-pressure chief executive Thierry Andretta following a slump in value over the past year.

It revealed that Andrea Baldo, the former boss of Danish fashion brand Ganni, will take over in the role in September to help drive improved sales despite a challenging backdrop in the sector. Shares lifted by 3.6% to 106.2p.

Gift card seller Moonpig finished higher after it received an upgrade from brokers at Deutsche Bank, citing improving consumer confidence. Shares were up 3.6% at 201p.

Meanwhile, the price of oil was lower, drifting to its lowest for more than a week, after recent concerns over potential disruption to supply eased back.

A barrel of Brent crude oil was down by 1.15% to 82.73 US dollars as markets were closing in London.

The biggest risers on the FTSE 100 were Severn Trent, up 63p to 2564p, Pershing Square, up 74p to 4246p, BT, up 2.4p to 140.45p, Smith & Nephew, up 16p to 1078p, and Haleon, up 4.8p to 331.5p.

The biggest fallers on the FTSE 100 were Burberry, down 40.8p to 857.4p, BP, down 20.4p to 454.25p, Next, down 336p to 8674p, Persimmon, down 52p to 1419p, and Melrose Industries, down 20.2p to 562.2p.