FTSE 100 declines, Musk dents cryptos, USD remains firm By Investing.com

Key Points

• FTSE 100 closing price of 6,963.80, -0.6%
• BT and Burberry fall after trading updates
• Musk U-turn dents cryptos
• Oil falls as pipeline resumes

By Samuel Indyk

Investing.com – The FTSE 100 closed in the red on Thursday but off the lows as US stocks regained some lost ground. Having dropped over 2% to a low of 6,823, the index staged a recovery throughout the afternoon to close lower by just 0.6%.

BT Group (LON:BT) was the worst performing stock in the blue-chip index after the company announced revenue fell 7% for the year ending March 31st, mainly due to the impact of Covid-19. On its potential sale of its BT Sport business, the CEO said it is in early talks with a number of partners but stressed there is a chance that a deal is not done.

Shares in luxury retailer Burberry (LON:BRBY) also declined after a trading update. Despite providing a positive update regarding sales, the company warned that operating margins will be impacted by higher operating expenses and increased investment in the forthcoming financial year.

Across the pond, Tesla (NASDAQ:TSLA) was in focus but shares opened broadly unchanged after CEO Elon Musk announced that Tesla would stop accepting Bitcoin as a payment for vehicles, citing environmental concerns.

The move led to a big sell off in many of the major cryptocurrencies with Bitcoin, Ethereum and Dogecoin all falling over 10%. However, Musk has not completely closed the door on digital currencies and said Tesla is looking at other cryptocurrencies that use less than 1% of Bitcoin’s energy per transaction.

In the traditional currency space, the US Dollar Index was trading broadly unchanged after holding on to gains post Wednesday’s higher CPI print. GBP/USD traded in a relatively narrow range around 1.4050 with EUR/USD trading just below 1.2100.

USD/CAD was also broadly unchanged although ING released a new research report upgraded their forecast for the CAD and now expecting USD/CAD to fall to a low of 1.1600 by year end, citing divergent central banks, improving Covid data and elevated oil prices.

WTI and Brent crude futures both traded lower as the Colonial Pipeline began to resume operations. Further weighing is continuing fears that the Covid situation is India is going to hamper the global demand recovery.

“Concerns are growing that the untamed spread of the coronavirus in India and in Southeast Asia will dent oil demand,” said analysts at oil broker PVM.

With the pipeline now returning to normal operations, attention turned to a report that said Colonial Pipeline Co. paid almost $5mln to the hacker group DarkSide. The company reportedly paid the ransom in cryptocurrency mere hours after the attack, a strong argument for those that say one of the main functions of cryptocurrencies is that they permit illicit behaviour.