London shares edge lower as mining, bank stocks weigh

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2 days ago

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FTSE 100 down 0.14%, FTSE 250 falls 0.1%
OECD cuts global growth outlook, cites trade war impact
UK needs tough action on government budget policy, OECD warns
Chemring Group hits near 14-year high
Euro zone inflation falls below ECB target
June 3 (Reuters) - Britain's main indexes fell on Tuesday, pressured by mining and financial stocks, with investors growing cautious over unpredictable U.S. trade policies, dampening market sentiment.
As of 0946 GMT, the blue-chip FTSE 100 was down 0.14%, and the midcap FTSE 250 fell 0.1%.
The Organisation for Economic Cooperation and Development (OECD) trimmed its global growth outlook and said the trade war was taking a bigger toll on the U.S. economy than before.
The Paris-based organization also urged Britain's government to make stronger efforts to reduce borrowing and debt, just days before Finance Minister Rachel Reeves presents her long-term spending plans.
Investors were already unsettled by U.S. President Donald Trump's Friday announcement to increase tariffs on imported steel and aluminum from 25% to 50%.
Industrial metal miners bore the brunt of the trade jitters, falling 2.5%, as London copper prices lost ground on concerns of possible U.S. tariffs on the metal.
Losses in financial stocks also weighed on both the indexes, with an index tracking the UK banks dropping 1.4%.
On the flip side, the aerospace and defence sub-index continued to gain for the second consecutive day after Prime Minister Keir Starmer announced on Monday 15 billion pounds ($20.3 billion) in spending to bring Britain up to "war-fighting readiness".
Chemring Group jumped 6.5% to the top of the midcap index after the defence contractor posted the highest-ever order book for the six months ended April 30. The stock hit a near four-year high.
Elsewhere, euro zone inflation eased below the European Central Bank's target last month, underpinning expectations for another interest rate cut this week. (Reporting by Ragini Mathur in Bengaluru; Editing by Vijay Kishore)