London's main stock market index dropped for a sixth straight session on Tuesday, as an escalating U.S.-China trade dispute continued to hurt exporters and commodities-focused companies, exacerbated by a modest recovery for the pound.
The FTSE 100, which suffered its worst day this year on Monday, was down another 0.6% by 0800 GMT, as oil majors BP and Shell and internationally-exposed stocks weighed on the blue-chip index.
A handful of strong corporate earnings from industrial firms helped the mid-cap FTSE 250 gain after five straight sessions of losses. The index rose 0.2%, outperforming a small fall in the pan-European STOXX 600 index.
Washington on Monday formally tagged China a currency manipulator for the first time since 1994, responding to Beijing allowing the yuan to weaken past 7 per dollar for the first time in a decade and signalling a deepening of the conflict between the world's two biggest economies.
"We've had such heavy selling I wouldn't be surprised to see some bump-ups as bulls test the water for a dip," Markets.com analyst Neil Wilson said.
Until last week's renewed escalation of the trade tensions, the FTSE 100 had recovered from a slump in May to post back-to-back monthly gains, helped by a slump in the pound that benefits many of its internationally-focussed constituents.
The latest trade friction has erased all of the index's July gains.
"We should expect things to get worse before they get better. There is likely a bit more pain ahead, but I feel the market will eventually turn around," Wilson said.
Holiday Inn owner InterContinental Hotels slipped 2.8% after it said fewer business travellers in China and protests in Hong Kong had led to lower demand in Greater China in the first half of the year.
On the FTSE 250, industrial group Rotork climbed 7.7% after half-year results that Jefferies called "very robust", while engineering firm Meggitt advanced 4.7% after it raised its annual organic revenue growth forecast.
But, fertilizer maker Sirius Minerals slumped nearly 26% to a more than four-year low after it suspended a planned $500 million bond sale central to the funding of its Polyhalite mining project in the north-east of England.
Comments
Comments are closed for this article.