UK shares fell to three-week lows on Tuesday as investors dumped financial, oil and mining stocks amid renewed fears about Brexit and Rome's budget showdown with Brussels, and Wall Street gloom across tech and retail spread across Europe.
|CRIMSON TAZVINZWA, AIWA! NO!|LONDON (Reuters) – UK shares fell to three-week lows on Tuesday as investors dumped financial, oil and mining stocks amid renewed fears about Brexit and Rome’s budget showdown with Brussels, and Wall Street gloom across tech and retail spread across Europe.
The FTSE 100 .FTSE ended the day down 0.8 percent, its third straight daily loss, with sentiment also hurt by heavy losses in the euro zone after a report Apple has cut production triggered a global rout in tech stocks.
While the political drama of last week has largely calmed, investors worried anew about UK Prime Minister Theresa May’s struggle to get her draft Brexit deal passed in Brussels and at home, with banks bearing the brunt of the selling.
A warning from the Bank of England that the economy could plunge into a crisis not seen since the 1970s in a “no deal” scenario reinforced those concerns, as companies including mid-cap lender CYBG (CYBGC.L) and Electrocomponents (ECM.L) began triggering contingency plans.
“Market selling has taken hold yet again today, with U.S. markets falling into negative territory for the year. Meanwhile, Brexit uncertainties continue to stifle market clarity for the pound and FTSE 100,” said IG market analyst Joshua Mahony.
Banks .FTNMX8350 and insurers .FTNMX8570, down 1.6 percent and 2.3 percent respectively, accounted for most of the losses.
Mining companies fell 1.9 percent as fresh concern about mounting tensions between China and the United States weighed on metals prices, and oil shares were hit by falling crude prices amid signs of growing supplies. U.S. crude hit its lowest in more than a year. [O/R]
Among the few corporate earnings as the results season draws to a close, Compass Group (CPG.L) and Halma (HLMA.L) were in demand, rising 5.4 percent and 3 percent respectively, as investors cheered cost-cutting efforts.