London's blue-chip index slipped on Wednesday morning as a drop in oil prices weighed on heavyweight energy stocks, according to City AM. Shares in BP and Shell both fell, dragging the FTSE 100 lower in early trading.
The decline came as reports suggested a potential US-Iran deal was moving closer, which traders took as a sign that crude supply could increase. Lower oil prices typically pressure the revenues of major producers like BP and Shell, which together hold significant weight in the UK's benchmark index.
City AM's live market coverage noted that the oil slide was the main factor behind the blue-chip weakness, offsetting gains elsewhere in the market. The report did not specify the size of the decline in either the oil price or the index.
The move follows a period of mixed trading for London stocks. Earlier in the week, the FTSE 100 had nudged higher as Wall Street headed in the opposite direction, according to Proactive Investors. Miners also provided some support to the index as investors looked ahead to key economic events, Reuters reported.
Market participants are now focused on upcoming US inflation data and earnings from chipmaker Nvidia, which could set the tone for global markets in the coming days, according to London South East. A separate report from Yahoo Finance UK noted that copper had hit a record high while oil slid, offering a partial counterweight to energy losses.
Investors will be watching whether the oil price stabilises and how the US inflation print lands later this week, as both could determine whether the FTSE 100 can recover its early losses.
