FTSE 100 Drops Before Budget as BP Shares Fall

On October 29, 2024, the FTSE 100 faced a notable downturn, closing 66.01 points lower at 8,219.61. This decline was chiefly driven by oil giant BP, which reported a profit decrease of nearly one-third, down to £1.75 billion. BP's share price fell 5%, impacted heavily by slumping refining margins affecting its income. The negative performance from such a significant company contributed to the overall market decline. Furthermore, the market was clouded by pre-Budget caution, with reports suggesting a potential 6% increase in the UK minimum wage. Traders were apprehensive about the inflationary impact of such changes on business costs. Although some firms, such as HSBC and Pearson, performed well, their gains could not offset the losses from BP. In the broader European context, major indices like the German Dax and Cac 40 also witnessed declines, illustrating a wider bearish sentiment in response to mixed economic indicators from the US, which included the lowest job openings recorded in over three years. As the UK prepares for potential economic changes, such as tax hikes and wage increases, market participants remain vigilant. The drop in BP shares is emblematic of broader economic challenges facing the energy sector and the potential knock-on effects on the UK economy as the Budget approaches.