The FTSE 100 drifted lower on Wednesday in lacklustre trading ahead of the Christmas break, although a chunky disposal by BP brought some life to proceedings.

The FTSE 100 index closed down 18.54 points, 0.2%, at 9,870.68. The FTSE 250 ended down 35.05 points, 0.2%, at 22,314.50, while the AIM All-Share closed up 1.42 points, 0.2%, at 759.39.

BP closed down 0.4% after announcing the sale of a 65% stake in its lubricants business Castrol to private equity firm Stonepeak Partners.

The London-based oil major said it will receive proceeds of around six billion dollars (£4.4 billion) from the sale, which puts an enterprise value on Castrol of around 10.1 billion dollars (£7.48 billion).

In February this year, BP announced a strategic review of Castrol as part of plans to raise 20 billion dollars (£14.8 billion) in disposals by the end of 2027.

“The transaction represents a significant milestone in BP’s commitment to accelerate its strategy, including simplifying the portfolio, strengthening the balance sheet, and focusing the downstream on its leading integrated businesses,” the FTSE 100 listing said.

Citi equity analyst Alastair Syme said comments from BP that deal proceeds will be directed “towards de-leverage (as opposed to shareholder returns)” reinforces “our view that the current share buyback programme will be cancelled ahead of the arrival of the new CEO in 2026.”

Woodside Energy boss Meg O’Neill joins BP on April 1 2026 after last week’s exit of chief executive Murray Auchincloss.

But RBC Capital Markets questioned the rationale of selling this “highly cash generative, low volatility and low capital intensity asset, as ultimately this is detrimental to the long-term dividend sustainability and earnings quality of the business.”

In European equities on Wednesday, the CAC 40 in Paris closed up 0.1%.

Stocks in New York are expected to open slightly lower on Wednesday after strong gains so far this week.

The Dow Jones Industrial Average is called 0.1% lower, while modest falls are seen for the S&P 500 and Nasdaq Composite when Wednesday’s abridged trading day begins.

The yield on the US 10-year Treasury was quoted at 4.16%, trimmed from 4.18%. The yield on the US 30-year Treasury was quoted at 4.82%, narrowed from 4.84%.

Weekly initial jobless claims data in the US provides the last major data point ahead of the Christmas break.

The jobs market has become a key focus for the US Federal Reserve as it weighs monetary policy options heading into 2026.

On Tuesday, the Conference Board’s measure of consumer confidence fell to 89.1 in December from an upwardly revised 92.9 in November with concerns over job security a prominent concern.

The pound was quoted at 1.3510 dollars at the time of the London equities close on Wednesday, up from 1.3481 dollars on Tuesday.

The euro stood at 1.1790 dollars, higher against 1.1777 dollars. Against the yen, the dollar was trading lower at 155.92 yen compared to 156.37 yen.

Back in London, weak pharmaceuticals stocks held the blue index back with index heavyweights GSK and AstraZeneca both down 0.5%.

Elsewhere, retailers were in the picture with attention focused on performance in the key holiday trading period.

Data from BDO’s High Street sales tracker showed UK retail sales returned to modest growth in the week before Christmas, driven by a sharp rebound in online spending, although in-store sales and footfall remained under pressure.

Total like-for-like sales rose 1.0% in the week ended December 21, reversing two consecutive weeks of decline.

However, the increase came against 2.6% growth in the same week last year, highlighting fragility in consumer demand.

Meanwhile, figures from Barclays showed UK consumer spending increased 0.8% year-on-year in the four weeks ending December 12.

“Pubs, restaurants and fast food strengthen, while other tracked categories broadly weaken,” the Barclays report said.

On the FTSE 100, Next was down 0.3%, as was Marks & Spencer, while JD Sports Fashion rose 0.2%.

Barclays and NatWest are through to the second round of bidding for wealth management group Evelyn Partners, Sky News reported.

Sky said the two high street banks were among the bidders notified last week that they were through to the second round of the Evelyn auction.

Royal Bank of Canada also is said to be in the frame to buy Evelyn, Sky said, while a number of private equity firms also have tabled offers for the business, which could be worth £2.5 billion, it said.

Shares in Barclays closed up 0.1% while NatWest eased 0.3%.

Crimson Tide slumped 17% after reporting a “significant customer”, which it did not name but described as a “major retailer”, has exercised a break clause in its contract.

The contract, which began a year ago, represents 12% of Crimson Tide’s annual recurring revenue.

But Crimson Tide said the contract loss will enable the company to redeploy resources towards higher-margin opportunities.

Faring better, PipeHawk shares soared 44% as it agreed to sell its loss-making Utsi Electronics subsidiary to Hong Kong-based Leidi Global Supply for £1.0 million in cash.

Brent oil was quoted at 62.58 dollars a barrel at the time of the London equities close on Wednesday, up from 62.09 dollars late on Tuesday.

Gold traded at USD4,492.58 an ounce, up from 4,462.05 dollars on Tuesday. The yellow metal had earlier hit a fresh record of 4,525 dollars an ounce.

Bullion has broken multiple records this year, driven partly by looser US monetary policy, robust safe-haven demand and strong central bank buying.

The biggest risers on the FTSE 100 were Schroders, up 7.2 pence at 407.5p, Pershing Square Holdings, up 52.0p at 4,870.0p, Persimmon, up 13.50p at 1,334.25p, Melrose, up 5.2p at 585.4p and Entain, up 5.4p at 750.9p.

The biggest fallers on the FTSE 100 were Games Workshop, down 280.0p at 18,875.0p, Fresnillo, down 32.0p at 3,206.0p, Rolls Royce, down 10.5p at 1,149.5p, Admiral, down 26.0p at 3,154.0p and Burberry, down 9.0p at 1,250.0p.

Next week’s global economic calendar has minutes from the December Federal Open Market Committee meeting, a raft of manufacturing PMI prints and house price data in the UK and US.

There are no significant events scheduled in next week’s UK corporate calendar.

– Contributed by Alliance News