LONDON: London's FTSE 100 ended lower on Tuesday, mainly due to weakness in financials and commodity-linked stocks, although the blue-chip index posted its best month since April. The FTSE 100 fell 0.4% to its worst session in nearly two weeks, weighed by a 1.4% drop in banks, while both energy and miners were down 1.5% and 0.3% respectively.
"We've seen a bit of a pullback in the commodities. And there may be a little bit of profit-taking in the market after Powell's dovish comments on Friday and now we're just seeing a corrective move on that," said Craig Erlam, senior market analyst at Oanda, referring to comments by the head of the US Federal Reserve, Jerome Powell, on stimulus tapering.
UK markets were closed on Monday for a public holiday.
The FTSE 100 has gained about 10.2% so far this year, but continues to lag its European and US peers as a resurgence in coronavirus cases across the world has sparked concerns of a slowdown in global economic growth.
However, the blue chip index ended August up 1.2%, its best monthly performance since April, helped by solid earnings and easing fears about early tapering of central bank support.
"There's no strong determination for central banks to pull back stimulus at this point and that kind of put market in a healthy position going into next couple of months," Erlam added.
Investors now await Markit/CIPS business activity data for August due later this week. Bunzl Plc fell 1.6% and was among the top drags after the business supplies distributor flagged supply chain disruptions, product shortages and a labour crunch in certain markets including Mexico, Australia and Britain.