FTSE 100 drops as supply issues continue

Market report

The FTSE 100 dropped as supply and staffing issues continue to weigh on UK firms.

London markets stumbled out of the blocks on Friday morning after weakness in the Asian markets and continued to stall amid the fuel shortages.

London’s top flight closed 59.35 points, or 0.84%, lower at 7,027.07 on Friday.

Danni Hewson, AJ Bell financial analyst, said: “Having spent an hour enjoying the charms of nearby petrol stations, it doesn’t surprise me at all to see that that week’s big winner on the FTSE 100 was Royal Dutch Shell and BP’S not done too shabbily either.

“The question undoubtedly being asked by anyone trying to get a handle on these supply issues is what’s next?

“We wanted the economy to run hot but right now Goldilocks will be eyeing her thermostat with trepidation and hoping her fixed tariff has a few months more to run. And over on Wall Street the pot’s bubbling nicely too.”

The US markets opened slightly higher despite seeing a rise in inflation for August as lawmakers seek to once again push through a vote on the infrastructure bill.

In Europe, the other key markets also drifted lower albeit with slightly shallower falls.

The German Dax decreased by 0.68% and the French Cac moved 004% lower.

Meanwhile, sterling made gains against the dollar as the US greenback took a breather after reaching a peak for the year so far on Thursday.

The pound was up 0.17% versus the US dollar at 1.356 and was up 0.19% against the euro at 1.169.

In company news, AO World shares plunged after the online white goods retailer warned its growth was being hit by the nationwide shortage of delivery drivers and disruption in the global supply chain.

Bosses said “challenging market dynamics” meant sales volumes in the UK and Germany were lower than expected in the second quarter.

Shares in the company plunged by 52.8p to 164.6p.

Elsewhere, Darktrace shares slid after three early investors in the company sold around 25 million shares. Darktrace shares finished down 26p at 794p.

KKR, Balderton Capital and Summit sold shares at a placing of 750p each, representing a 9% discount of the firm’s value at the end of Thursday, after seeing its value triple since its float in April.

Brent crude increased by 0.34% to 78.58 dollars per barrel.