Energy sector leads FTSE 100 lower

The blue-chip FTSE 100 declined 0.8 per cent, while the midcap FTSE 250 index dropped 1 per cent, notching its lowest close in more than one month

The UK's benchmark FTSE 100 dropped on Tuesday due to broader declines led by the energy sector on losses in BP, while investors kept their focus on the upcoming budget later this week.

The blue-chip FTSE 100 declined 0.8 per cent, as of 1621 GMT, while the midcap FTSE 250 index dropped 1 per cent, notching its lowest close in more than one month.

One of the biggest contributors to overall losses was the energy sector, pulled down by a decline in oil prices and a 5 per cent tumble in heavyweight BP's shares.

BP reported a 30 per cent slip in third-quarter profit to $2.3 billion, the lowest in nearly four years, weighed down by weaker refining margins and oil trading results.

The aerospace and defence sector also slipped 1.2 per cent, partly affected by a 1.4 per cent drop in engineering firm Rolls-Royce Holdings.

In contrast, HSBC Holdings climbed 3.1 per cent after the lender posted a better-than-expected third-quarter profit on rising wealth and wholesale banking revenue, lifting the banking sector, up 0.8 per cent.

Industrial metal miners also gained 0.3 per cent after copper prices gained on renewed hopes a large fiscal stimulus package by top metal consumer China.

The personal goods index declined 2.6 per cent.

Among other movers, Pearson was 3.6 per cent higher after the British education company reported 5 per cent growth in underlying sales in its third quarter, boosted by stronger performance in assessment and qualifications.

Investors were squarely focussed on the country’s new government's budget on October 30, where finance minister Rachel Reeves will set out her first tax and spending plans, which must address a difficult fiscal picture without raising major taxes on workers.