MARKET WRAP: FTSE slides, Royal Mail delivers, Oil hits 6-week low

© Reuters.

Key Points

Miners, oil stocks weigh on FTSE
Royal Mail continues to deliver
Homebuilders higher after Crest Nicholson update
GBP steady
Oil hits six-week low before bouncing
Bitcoin struggles below $60,000

By Samuel Indyk

Investing.com – The FTSE 100 declined for the third consecutive day on Thursday as a fall in miners and oil companies dragged the index lower amid a decline in oil and copper prices.

Royal Mail (LON:RMG) was the best performing stock in the blue-chip index as the company continued to deliver strong revenue growth. The company has reaped the rewards of changing habits brought on by the pandemic as more people turned to online shopping.

“As turnarounds go, Royal Mail can finally say it is making progress,” said AJ Bell Investment Director Russ Mould. “Revenue and profit are growing, net debt is coming down, it has realised some cost savings, and it is confident enough to use some of its cash reserves to buy back shares and pay shareholders a special dividend.”

Homebuilders were also higher following a positive trading update from Crest Nicholson (LON:CRST). The company said it expected profit for the year to be ahead of market consensus. Shares were higher after the news. Other homebuilders – including Taylor Wimpey (LON:TW), Barratt Developments (LON:BDEV), and Persimmon (LON:PSN) – rose in sympathy, cementing the rise following yesterday’s data that showed house prices had increased 11.8% in annual terms in September.

GBP/USD was relatively steady, trading near a one-week high with rate hike expectations from the Bank of England continuing to support the pound.

At the other end of the central bank spectrum is the Turkish Central Bank, who cut interest rates for the third consecutive month. The TRY weakened following the 100 basis point rate cut, with USD/TRY reaching another record high, this time just below 11.00.

WTI crude futures hit a six-week low on Thursday, with Brent futures also trading lower before finding some support. News that the Biden administration had called on allies and China to release oil reserves had weighed on energy prices, while rising COVID cases in Europe are also casting doubt on the demand recovery.

Bitcoin is still struggling to make a firm break back above $60,000, while other major cryptocurrencies were also trading lower.

“Bitcoin is continuing to struggle and once more we’re seeing it test the late October lows around $58,000,” said OANDA Senior Market Analyst Craig Erlam. “A significant break below here could see it accelerate to the downside, at which point focus may shift back towards the $50,000 region.”

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