London’s FTSE 100 dipped to a one-month low yesterday as oil majors dived after US inventories bulked up and a rise in pound knocked exporters, but gains in Sainsbury’s and LSE following upbeat results helped cushion the fall.
The FTSE 100 ended 0.4% lower and the more domestically-focused FTSE 250 inched down 0.1%.
Shell shed 1.4% to a month low and BP gave up 2.1%, as crude prices weakened after US oil inventories rose more-than-expected with output reaching a new record of 12.3mn barrels per day.
As sterling rose to multi-week highs with lingering hopes of progress in cross-party Brexit talks and ahead of Bank of England interest rate meeting today, exporter companies bore the brunt as much of their revenue is earned in dollars.
British American Tobacco, AstraZeneca, GlaxoSmithKline were among the biggest drags.
Contrary to the mood in Britain, the S&P 500 index notched a fresh record high on the Wall Street as gains in Apple after forecast-beating results thrust up technology stocks.
Among big fallers on UK’s blue-chip index was Takeaway group Just Eat with a near 3% drop after JP Morgan called European rivals Delivery Hero and Takeaway.com more attractive.
Education group Pearson lost 2.1% after news of a planned merger between Cengage and McGraw Hill, with Liberum analysts calling the planned deal a “major headache” for Pearson.
However, earnings reports boosted many blue-chips.
Sainsbury’s jumped 4.3% after the supermarket group’s underlying full-year profit beat market estimates and it said it would accelerate investment in its store estate and technology.
London Stock Exchange climbed 3.4% after it reported higher quarterly income, as its clearing and information services businesses grew strongly against what it called a challenging market backdrop.
Meanwhile, the pound hit a two-week high yesterday as investors sensed in comments by Prime Minister Theresa May signs of progress in Brexit talks between the British government and the main opposition party.
Sterling neared $1.31 after May said her plan to negotiate a customs arrangement with the EU was similar to that of the Labour Party and called for an end to uncertainty.
The pound was one of the only major currencies to move yesterday with markets in Asia and in much of Europe closed for holidays, keeping trade subdued.
The British currency has stuck within a range of $1.28-1.30 since Britain pushed its scheduled departure from the European Union back from March until October 31.
It remains unclear when, how or even if Brexit will happen.
British newspapers reported on Tuesday that May wants Brexit talks with Labour, aimed at breaking an impasse in parliament over the terms of departure from the EU, to conclude by the middle of next week and that buoyed sterling.
The pound rose 0.4% to $1.3085 and was flat against the euro at 85.95 pence.
Overall volatility in the currency markets remained near five-year lows.
Despite the pound’s gains against the dollar, net positions by hedge funds in sterling slipped back into negative territory, according to the latest data. 
Lloyds rose 1.6% after it cut its target for its Common Equity Tier 1 ratio – a closely watched measure of balance sheet strength, with Goodbody analyst John Cronin saying that meant more headroom for distribution to investors.
But that was not enough to keep the main bourse out of the red, as a surprise fall in United States construction spending in April also weighed on the index.
Markets also awaited the US Federal Reserve’s policy statement scheduled for later in the day and chairman Jerome Powell’s press conference shortly afterwards.
Overall trading volumes were slim as many markets elsewhere in Europe were closed for a May 1 public holiday.