The FTSE 100 gave back some of its Monday gains as the index was weighed on by a strong performance from the pound on Tuesday.
By the end of the day London’s top shares had dropped 0.2%, losing 15.73 points and ending the day at 7,369.44.
Sterling rallied to a three-month high, trading up 1.1% to around 1.19 dollars by the time markets closed in London.
It came as US producer inflation figures (PPI) came in below expectations on Tuesday, and the markets look forward to the Chancellor’s autumn statement on Thursday.
“European markets have seen another positive session, although the FTSE 100 has slipped back, failing again to hold above the 7,400 level, with the rise in the pound post US PPI appearing to act as a bit of a drag on the UK index,” said Michael Hewson, an analyst at CMC Markets.
The day after soaring to the top of the FTSE, online supermarket Ocado was bookmarking the index at the other end, dropping around 17% on the day.
It was unclear what had moved the company’s shares so much both days, however The Times published a story on Tuesday morning questioning the company’s valuation.
The business has seen its shares soar over the past two weeks after it announced a deal with a South Korean retail giant.
Vodafone was also a major drag. The business reported a set of “lacklustre” figures, according to Mr Hewson.
“(Vodafone has) been a serial underperformer since the company disposed of its Verizon stake all the way back in 2014, falling year over year, and have shown little sign of mounting any sort of recovery,” the analyst said.
“Earlier this year there was a largely indifferent response to the company’s Q1 numbers, and today’s first-half numbers appear to be similarly lacklustre, the shares falling back after the telecoms giant reported a 2% rise in revenues to 22.9 billion euros (£20 billion), helping to boost operating profits by 12% to 2.9 billion euros, with a decent performance in the UK business offsetting weakness in Italy and Spain.”
The FTSE’s performance lagged behind its European peers, with Germany’s Dax and France’s Cac 40 both gaining half a per cent.
New York traders also pushed the main indexes into the green. The S&P 500 gained 1.5% while the Dow Jones was trading up 0.7% by the time markets had closed in Europe.
In other company news, Imperial Brands said that it had taken a £463 million hit from pulling out of Russia – helping to push down its profits.
The business said that operating profit had dropped nearly 15% to £2.7 billion in the year to the end of September.
Shares dropped by 0.5%.
Shares in defence company BAE Systems rose by 1.4% after the company saw sales jump as military spending ramped up in the wake of Russia’s illegal war in Ukraine.
The business said that many of the countries it counts among its customers have either already announced increases in defence spending or are planning increases.
The biggest risers on the FTSE 100 were Centrica, up 2.82p to 86.28p, Melrose Industries, up 4.2p to 131.4p, Scottish Mortgage Investment Trust, up 25.2p to 833.8p, BAE Systems, up 12.4p to 738.6p, and Rightmove, up 8.6p to 566p.
The biggest fallers on the FTSE 100 were Ocado, down 155.4p to 770.2p, Vodafone, down 8.27p to 95.89p, Endeavour Mining, down 50p to 1,656p, B&M, down 11p to 392.5p, and Severn Trent, down 68p to 2,688p.