Energy firms drag FTSE 100 to two-month low; Drax tanks

UK's FTSE 100 slid on Wednesday to a two-month low weighed down by energy firms, as investors were worried that economic recovery in top consumer China might be stalling, while power firm Drax logged its worst day in over a year on a regulatory probe. The internationally focused FTSE 100 dropped 0.2%, bogged down by a 1% loss in heavyweight energy firms after weak China economic data clouded the outlook for raw materials.

UK's FTSE 100 slid on Wednesday to a two-month low weighed down by energy firms, as investors were worried that economic recovery in top consumer China might be stalling, while power firm Drax logged its worst day in over a year on a regulatory probe.

The internationally focused FTSE 100 dropped 0.2%, bogged down by a 1% loss in heavyweight energy firms after weak China economic data clouded the outlook for raw materials. "We're seeing pressure come from numerous parts of the world today on UK equity markets," said Joshua Warner, market analyst at City Index.

"The economic data (from China) showed that the post-pandemic recovery may not be running at full steam as we were hoping and so we've got some commodity stocks trading lower today." China-focused Prudential Plc also fell 2.5% as the life insurance firm said its finance chief would leave the company after an investigation into a recent recruitment showed his conduct had fallen short of standards.

The mid-cap FTSE 250 shed 0.2%, weighed down by a 4.1% drop in Drax Group Plc after energy regulator Ofgem said it was investigating whether the power firm was in breach of annual profiling reporting requirements. The FTSE 100 is set for losses of nearly 5% in May, its worst month since the market frenzy in September last year. International factors like U.S. debt deal uncertainties and worries of stalling global growth have weighed on the minds of investors.

The domestically-focused FTSE is also set for a monthly loss of nearly 4% as concerns back home like inflation and consequent central bank monetary tightening dented sentiment. In a bright spot, B&M European Retail SA surged 5.7% to an over two-month high as the discount retailer forecast higher annual core profit.

Entain Plc shed 2.1% after the Ladbrokes-owner said it was likely to get slapped with a financial penalty as part of a probe.