FTSE 100 dragged lower by oil stocks despite US gains, BT down amid rumours of Sky and CityFibre link up and Palo Alto Networks beats expectations after rival CrowdStrike’s big outage

“The FTSE 100 started off Tuesday on the back foot despite gains in the US and Asia overnight as its heavy weighting towards oil stocks proved a headwind,” says AJ Bell Head of Financial Analysis Danni Hewson.

“Hopes of a ceasefire in Gaza and continuing concerns about Chinese demand combined to drive oil prices to their lowest levels since the beginning of August and that put index heavyweights BP and Shell under pressure.

“While oil did dip below $76 around the beginning of August it has consistently traded above $80 per barrel for much of this year. If oil prices remain at these levels it could help reduce inflationary pressures and give central banks more room to make interest rate cuts.

“Tomorrow’s minutes from the latest Federal Reserve meeting on rates provide a scene setter for Fed chair Jerome Powell when he addresses the Jackson Hole Symposium on Friday.

“Investors will be looking for Powell to give some indication of the trajectory of rates for the remainder of this year, with a cut widely expected at the Fed’s September meeting as several Fed officials have given their own signals that such a move might be imminent.

“The expectations for a cut to US interest rates are helping gold, which remains in touching distance of its record levels above $2,500.

“BT shares came under pressure on fears of an enhanced competitive threat for its Openreach broadband operation amid chatter Sky might start partnering with CityFibre in 2025. However, CityFibre’s modest scale and focus on rural areas suggest it shouldn’t be a huge issue.”

Palo Alto Networks

“While it was hard to judge the full impact of CrowdStrike’s botched update in July at the time, the latest numbers from rival cybersecurity firm Palo Alto Networks indicate it could be resulting in some shifts in market share.

“Palo Alto’s numbers came in ahead of expectations and CEO and chair Nikesh Arora suggested the outage associated with CrowdStrike is leading businesses to reevaluate their options. Tellingly, he also outlined the company’s methodical approach to its own content updates.

“There are obstacles for customers looking to change providers given how embedded they are to a company’s processes and operations, but the scale of the problems last month will have given some pause for thought.

“Palo Alto’s numbers confirm that this remains a growth industry with firms having to take action to keep themselves and their clients safe in a world where new cyber threats are developing and emerging all the time.”

These articles are for information purposes only and are not a personal recommendation or advice.