FTSE falls as European natural gas prices drop to pre-Ukraine War levels
European stock markets plunged to the bottom on Thursday, as natural gas prices fell back to levels they were before the crisis. Ukraine war.
The FTSE 100 is a London stock exchange.^FTSE) fell 0.6% after opening, while the CAC (^FCHI) tumbled 0.5% in Paris, and the DAX (^GDAXIFrankfurt, a 0.3% decrease in )
The month-ahead European gas future contract fell as low as €76.78 per megawatt hour, its lowest level in 10 months, according to Refinitiv data.
This is due to higher-than-normal temperatures this Winter and consumption reduction targets.
The UK’s gas prices are also down from earlier in the year. The average gas price for Wednesday was 155p per thermom, compared to 200p/therm at start of 2022 and 500p/therm August.
Watch: What caused gas prices to rise?
It occurs as industrial action continues in Britain today. The Trades Union Congress’ new head, the Trades Union Congress, (TUC), has warned that there will be more strikes in 2023 unless it enters into negotiations over pay raises.
Incoming general secretary Paul Nowak said “we must end Britain’s living standards nightmare” – which has been fuelled by higher energy costs – and is also accusing ministers of “sabotaging efforts to reach settlements”.
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Across the pond on Wall Street, S&P 500 futures (ES=F) were up 0.1%, Dow futures (YM=F) shed 0.06%, and Nasdaq futures (NQ=F) were 0.4% higher as trade began in Europe.
On Wednesday, US stocks closed down with the S&P 500 and NASDAQ falling 1.2% and 1.35% respectively.
Yesterday’s sell-off went beyond tech shares, with oil company valuations following commodity price downwards, and the US airlines with exposure to winter storm cancellations also having a bad day.
Traders are awaiting the US weekly jobless figures later in the afternoon.
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Overnight, stocks in Asia fell with the Nikkei (^N225) falling 0.9% in Japan while the Hang Seng (^HSI) fell 0.8% in Hong Kong, and the Shanghai Composite (000001.SS) dipped 0.4% on the day.
“China has seen a rise in citizens booking overseas travel following the lifting of quarantine rules on arrival, but it may not be totally plain sailing for Chinese tourists as other countries voice concern on the transparency of data on domestic cases in China,” Derren Nathan, head of equity research at Hargreaves Lansdown, said.
“Japan has imposed new entry restrictions on Chinese visitors and the US will also now require Chinese residents to show a negative test on entry.”
Officials also reported that the Russian rouble fell to an eight-month low against dollars on Thursday as Moscow launched 120 missiles at Ukrainian cities. This is the largest wave of strikes in Ukraine for several weeks.
This morning, the currency fell to 72.9 rubles to the US dollar, its lowest level since April. Analysts are predicting that sanctions on Russia’s oil and gas sales will hit export revenues.
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