London’s FTSE 100 suffered its steepest fall in nearly a month on Tuesday as banking stocks and energy titan BP pulled down the index, while investors seemed unfazed by Federal Reserve Chair Jerome Powell’s testimony before the U.S. Congress.
The blue-chip FTSE 100 lost 0.7%, logging its third straight day of losses. The domestically-focused mid-cap FTSE 250, which rose after the Labour Party’s election win last week, was down 0.7%.
Banking stocks were the biggest weight on the FTSE 100 as markets were spooked by comments from Bank of England policymaker Jonathan Haskel on Monday that stuck to his position of keeping interest rates on hold for now.
Barclays, HSBC and Lloyd’s all fell between 3% and 4%.
“His (Haskel) comments put a dampener on banks – they’re a sector where margins are being squeezed by high interest rates,” said Fiona Cincotta, senior markets analyst at City Index.
The energy sector fell 1.3%, weighed down by a 4.3% loss in BP after the oil giant warned of a hit to its second-quarter earnings from lower realised refining margins and weak oil trading.
London stocks subdued as broader gains offset fall in BP; Powell’s testimony in focus
On the flip side, precious metal miners rose 0.7% in tandem with gold prices.
Investors moved past comments from the Federal Reserve’s Jerome Powell in which he stated that a policy rate cut would not be appropriate until the Fed gains greater confidence that inflation headed towards the 2% target.
U.S. consumer price index figures and Britain’s GDP are due later in the week and could influence the future trajectories of interest rate cuts in the economies.
In corporate news, Indivior Plc plummeted 35.9% after the drugmaker said it would cut about 130 jobs and lowered its profit forecast for the year.
Recruiter PageGroup tumbled 4% to the bottom of the FTSE 250 after warning of lower annual profit, citing weaker-than-expected hiring in June and a more cautious view for the second half of the year.
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