Gas prices may have eased off a little from their peaks last week, but traders still worried about inflation on Tuesday, sending European stocks into the red.
he FTSE 100 ended down 0.2%, dropping 16.62 points to end the day at 7,130.23.
It had been hit by a sell-off from traders who were trying to run away from risk. Despite noise out of Russia that pushed down gas prices, investors are still concerned about price rises elsewhere.
“Gazprom has stepped in to ramp up natural gas supplies to Europe today, with fears of rampant upside in prices easing for now,” said Joshua Mahony, senior market analyst at IG, an online trading platform.
“However, while inflation fears have eased after Russian intervention, the recent resurgence in lumber and iron ore prices highlight the inflation evident across most physical assets.”
In Europe, the Dax index and the Cac 40 both fell by 0.3%.
Mr Mahony said: “Despite the weakness evident throughout European markets, it is once again the FTSE 100 which outperforms its mainland European counterparts.
“Risks evident throughout the manufacturing sector continue to hold back German stocks, and that looks likely to persist given the expectation that supply chain and commodity pricing woes will remain in place for some time yet.”
Across the pond, both the Dow Jones and S&P 500 in New York were trading flat when markets closed in Europe.
Sterling was flat against the dollar at 1.3601, but rose by 0.1% against the euro to 1.1786.
One stand-out loser on the London market on Tuesday was THG, the company formerly called The Hut Group.
Shares plummeted 35% as bosses spoke to shareholders for the company’s first capital markets day since it listed in September 2020.
The meeting was meant to reassure shareholders after a tough month for the firm’s share price. But instead it spooked them. The drop started at around 3pm on Tuesday afternoon.
The company is facing concerns over proposals to spin off its beauty arm, and its tech platform.
Another big faller, although miles better than THG, was easyJet. The airline had said it expects flying during the winter months to remain much lower than before the pandemic.
Capacity is set to be up to 70% of 2019 levels in winter, even as the company increased the number of seats it was offering.
In the past three months, capacity has reached 58% of where it was two years ago.
The biggest risers on the FTSE 100 were Ocado, up 84p to 1,649.5p, CocaCola HBC, up 109p to 2,487p, Bunzl, up 46p to 2,443p, Croda, up 158p to 8,424p, and Polymetal, up 24p to 1,294p.
The biggest fallers on the FTSE 100 were IAG, down 6p to 175.9p, United Utilities, down 33p to 1,472.5p, Prudential, down 30p to 1,458p, Melrose Industries, down 3p to 162p, and Rio Tinto, down 96p to 5,005p.