London’s top-flight index remained in the red as investor jitters over the Italian referendum and Wednesday’s crunch meeting on global oil supply continued to dog the market.
The FTSE 100 Index was down 50.5 points at 6749.02, as energy stocks took a further hit after investors questioned whether Opec members would be able to strike a deal on Wednesday to tackle the production glut.
Shares in Royal Dutch Shell B were down more than 1%, or 29.5p to 2041.5p, while rival BP was off 1%, or 7.2p to 445.2p.
The cancellation of Monday’s meeting between Opec and non-Opec producers – triggered by Saudi Arabia’s failure to send a delegate – took its toll on oil prices in the previous session.
However, Brent crude prices rebounded in the afternoon session after Iraq oil minister Jabar Ali al-Luaibi said he was “optimistic” that a deal could be reached to support prices.
On Tuesday, the price of oil was down 44 cents – or 0.9% – to 47.80 US dollars a barrel as nervousness among investors persisted ahead of the key Vienna meeting on Wednesday.
Banking stocks were also struggling to bounce back amid concerns over Italy’s referendum vote on constitutional reforms.
A Yes vote from the Italian public on December 4 would hand powers back to Italy’s regions, making parliament’s lower house – the Chamber of Deputies – more powerful than the Senate.
However, a No vote could be enough to topple Prime Minister Matteo Renzi’s government, sparking a bout of economic uncertainty.
Royal Bank of Scotland was down 1%, or 2.1p to 194.1p, while Lloyds Banking Group dropped 0.3p to 57.6p.
Across Europe, Germany’s Dax was up 0.1% and the Cac 40 in France was 0.8% higher.
On the currency markets, the pound enjoyed some uplift after the Bank of England’s money and credit report showed the number of mortgages being approved for homebuyers hit a seven-month high in October.
Some 67,518 home loans for house purchase got the go-ahead, marking the highest figure since March.
Sterling was up 0.4% against the US dollar at 1.246 and rose 0.4% versus the euro at 1.174.
In UK stocks, Countryside Properties raced ahead after it said the market recovered from an initial bout of post-Brexit vote uncertainty and reported a sharp rise in profits.
The group, which has its headquarters in Essex and floated on the stock market in February, said full-year pre-tax profits rose from £28 million to £78.6 million.
Shares were up nearly 2%, or 4.1p to 234.1p, while the wider housebuilding sector also clocked gains, with Barratt Developments and Persimmon rising 11.2p to 476.8p and 30p to 1,721p.
BT was up 0.6p to 350.9p despite being ordered to legally separate its Openreach network arm after failing to address competition concerns voluntarily.
Telecoms watchdog Ofcom said it was “disappointed” with BT’s proposals since it outlined plans in July to make Openreach a “distinct company” within the BT Group.