London’s FTSE 100 fell 1% on Tuesday, weighed down by financial stocks tracking broder losses in European markets as political uncertainty spooked investors and weakness in industrial miners further weighed on the market.
The benchmark FTSE 100 index’s decline marked its worst day in nearly two months while the mid-cap FTSE 250 index slipped 0.9% after touching its lowest in over a month.
Non-life insurers fell 2.7%, the worst hit sector, while bank stocks lost 2.3%.
“What we are seeing is a knock-on effect about the political uncertainty emanating from France that has affected banking stocks,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
“There is a real concern (that) the far right parties are enjoying a surge of popularity across Europe and with their more populist policies, which is a higher spending, that has led to concerns for the financial sector,” she added.
Industrial miners recorded their worst day in over a month, declining 1.9%. They fell in tandem with copper prices that hit a seven-week low on a stronger dollar, rising inventories and weak indicators in China. Data showed that the British unemployment rate rose to 4.4% in April from 4.3%.
London stocks up as labour market data shows signs of cooling
“Wage growth remains sticky, so it looks unlikely that the BoE will cut this month. August still looks like a possibility,” Streeter added.
Focus is now on a key inflation reading in the United States on Wednesday, followed by the Federal Reserve’s next decision on interest rate cuts.
Among individual stocks, Rio Tinto lost 2.0% as the mining giant said it will buy Mitsubishi Corp’s 11.65% stake in Boyne Smelters (BSL) for an undisclosed sum.
Computer maker Raspberry Pi soared more than 37.5% in its trading debut.
Oxford Instruments surged 7.1% to the top of the FTSE 250 after the nanotechnology tools maker’s full-year results beat estimates.
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