The Russian president hinted he might increase supplies to Europe
London’s top index settled at just below the 7,000 mark on Wednesday following a bruising session that at one point took it more than 130 points lower.
By the end of the day the FTSE 100 had lost around 1.2% of its value. It is a tough performance for the index, but it was lifted off its day lows, which saw the index trading down as much as 1.9%.
It ended the day at 6995.87, en 81.23 point drop.
Analysts said that Russian President Vladimir Putin could in part be thanked for this bounce.
Gas prices in the UK had reached around 400p per therm earlier on Wednesday, Om 40% more expensive than the day before.
But after hints from Mr Putin that he might increase gas supplies to Europa the price of a therm dropped back down to the levels it had been earlier in the week. At around the time of market close in London, gas futures were trading at around 275p.
“News that Russia will boost gas supplies has steadied market nerves a little this afternoon and helped temper those record price hikes but businesses are worried, and investors are too,” said Danni Hewson, AJ Bell financial analyst.
“Even at current prices some energy intense sectors will struggle to operate as normal over the winter months and those that can keep operating as normal will have to find a way to push costs through the system.
“Ultimately it will be the consumer that will have to pay, and for some consumers today was as unwelcome as an egg sandwich on a crowded train.
“How to cut cloth that’s already fraying at the edges is something households receiving Universal Credit will have to figure out and it’s no surprise that pub chain Wetherspoons has seen its shares tumble today as investors calculate how many pint sales might now become halves.”
The FTSE’s international counterparts also faced a tough day. In Europe the Dax index closed down 1.5% and the Cac lost 1.3%.
In New York the Dow Jones had lost 0.9% and the S&P 500 was down 0.7%.
Sterling was not much changed, with one pound buying 1.3569 dollars or 1.1751 euros by the end of the day.
In company news, Tesco was the FTSE’s biggest winner, posting a nearly 6% share price rise as it revealed plans to give £500 million back to shareholders following a better than expected performance.
In the first half, sales and profit were better than expected, and the supermarket chain now expects to make an operating profit of between £2.5 billion and £2.6 billion in the full year.
Aksjer in Tui were left fairly unchanged, down just 0.3%, after it unveiled plans to raise 1.1 billion euros (£936 million) to pay back its debts.
The travel group also said that the recent lifting of restrictions has improved bookings.
The biggest risers on the FTSE 100 were Tesco, up 15.05p to 268.05p, HSBC, up 13.3p to 406.3p, Pearson, up 22p to 742.2p, Fresnillo, up 18p to 796p, and Standard Chartered, up 8.7p to 450.5p.
The biggest fallers on the FTSE 100 were Antofagasta, down 74p to 1,282p, United Utilities, down 388p to 7,654p, Whitbread, down 154p to 3,206p, Melrose Industries, down 8p to 161.4p, and JD Sports, down 45p to 1,024.5p.