Industrial stocks drag UK equities, investors assess US-EU trade deal
The blue-chip FTSE 100 reversed earlier gains with a 0.4% fall, while the domestically focused midcap FTSE 250 index fell 0.8%.
The U.S. struck a framework trade agreement with the EU on Sunday, which imposes a 15% tariff on most EU goods and requires the bloc to invest around $600 billion in the United States.
However, some European capitals complained it was lopsided in favour of Washington.
Meanwhile, data showed on Monday a downturn in British retail sales extended into its tenth month in July as rising prices weighed on consumers, although the pace of the fall was less severe than in June.
Also on Monday, the U.S. and China met in Stockholm to resume talks to resolve longstanding economic disputes at the centre of a trade war between the world's top two economies, aiming to extend a truce by three months.
In the market, the industrial subindex led the broader sectoral decline, down 1.6%, with RS Group falling 3.1%.
Precious and industrial metal miners fell nearly 1% and 0.9% respectively, tracking lower gold and metal prices.
Conversely, energy stocks rose 1.2% as oil prices rose.
Heavyweight BP gained the most in the FTSE 100, up 2.2%.
Among individual stocks, Ocean Wilsons Holdings slipped more than 14% after the British investment holding company agreed to an all-share merger with Hansa Investment , creating a £900 million ($1.21 billion) diversified investment firm.
The Bank of England is expected to slow the pace soon at which it shrinks its 558 billion-pound ($754 billion) holdings of government bonds, with economists hoping for some clarity next week on the central bank's longer-term goals for the stockpile.
Traders are currently pricing in an 86.5% chance of a 25 basis point BoE interest rate cut on August 7, according to data compiled by LSEG.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
8 minutes ago
- Business Recorder
Indian refiner Nayara trims crude runs in wake of EU sanctions, sources say
NEW DELHI: Russia-backed Indian refiner Nayara Energy has reduced operations at its 400,000-barrel-per-day refinery in the aftermath of new European Union sanctions that targeted the firm, five sources familiar with the matter said. Privately-held Nayara, which runs India's third-biggest refinery at the port of Vadinar in the western state of Gujarat, controls nearly 8% of the country's total refining capacity of about 5.2 million bpd. The sanctions package unveiled on July 18 against Russia and its energy sector has made it tougher for Nayara to export its refined products, resulting in storage constraints, two of the sources said. Since the EU curbs on Nayara, traders have grown cautious in dealing with its fuel, trade and industry sources say. Last week, Reuters reported that at least two tankers skipped planned loadings at Vadinar while a tanker carrying a cargo of Russian crude was diverted away from the refiner. One source said Nayara was operating the refinery at 70% of capacity, while another put the figure at 80%. EU-sanctioned Indian refiner Nayara takes Microsoft to court over outage Nayara ran at more than 100% of its nameplate capacity in each of the three months through June, the most recent government data shows. All the sources sought anonymity because they were not authorised to speak to the media. Nayara did not immediately respond to a request for comment. Nayara typically exports at least four million barrels of refined products each month, including diesel, jet fuel, gasoline and naphtha, through traders. India has become the biggest buyer of seaborne Russian crude in the aftermath of Moscow's Ukraine invasion. Nayara, majority-owned by Russian entities including Rosneft, is a key buyer of Russian oil. Nayara's chief executive resigned after the sanctions and was replaced by Sergey Denisov, who had been its chief development officer, Reuters reported on Friday. On Monday, Nayara said it filed legal proceedings against U.S. software giant Microsoft following its suspension of services to the refiner. Nayara, based in the commercial capital of Mumbai, operates more than 6,000 fuel stations.
Business Recorder
an hour ago
- Business Recorder
Buying momentum persists, KSE-100 gains ovr 600 points
The Pakistan Stock Exchange (PSX) observed buying momentum, with the benchmark KSE-100 Index gaining over 500 points during the opening minutes of trading on Tuesday. At 11:35am, the benchmark index was hovering at 139,982.79 level, an increase of 602.74 points or 0.43%. Buying was seen in key sectors including automobile assemblers, cement, commercial banks, fertilizer, oil and gas exploration companies and refinery. Index-heavy stocks, including ARL, PRL, MARI, POL, PPL, SNGPL and UBL traded in the green. On Monday, PSX saw modest upward momentum, fueled by investor interest in cement and technology stocks ahead of the monetary policy announcement and key corporate earnings. The benchmark KSE-100 Index gained 172.77 points, or 0.12%, to close at 139,380.06 points Internationally, Asia shares eased on Tuesday while the euro nursed its losses as investors pondered the downside of the US-EU trade deal and the reality that punishing tariffs were here to stay, with unwelcome implications for growth and inflation. The initial relief over Europe's 15% levy quickly soured when set against the 1% to 2% that stood before President Donald Trump took office. Leaders in France and Germany lamented the outcome as a drag on growth, pulling down stocks and bond yields across the continent while slugging the single currency. Trump also flagged a 'world tariff' rate of 15% to 20% on all trading partners that were not negotiating a deal, among the highest rates since the Great Depression of the 1930s. A further risk to world growth came from a sudden spike in oil prices after Trump threatened a new deadline of 10 or 12 days for Russia to make progress toward ending the war in Ukraine or face tougher sanctions on oil exports. The air of caution saw MSCI's broadest index of Asia-Pacific shares outside Japan slip 0.7%. Japan's Nikkei eased 0.8% while Chinese blue chips fell 0.1%. This is an intra-day update
Business Recorder
2 hours ago
- Business Recorder
Oil slips amid economic concerns, US rate decision awaited
SINGAPORE: Oil prices slipped on Tuesday amid uncertainty about the global economic outlook following the U.S.-EU trade deal, and as investors awaited the U.S. Federal Reserve's interest rate decision. Brent crude futures were down 6 cents, or 0.1%, to $69.98 a barrel at 0425 GMT, while U.S. West Texas Intermediate crude was at $66.60, down 11 cents, or 0.2%. Both contracts settled more than 2% higher in the previous session, and Brent touched its highest level since July 18 on Monday. The trade agreement between the United States and the European Union, while imposing a 15% import tariff on most EU goods, sidestepped a full-blown trade war between the two major allies that would have rippled across nearly a third of global trade and dimmed the outlook for fuel demand. The agreement also calls for $750 billion of EU purchases of U.S. energy in the coming years, which analysts say the EU has virtually no chance of meeting, while European companies are to invest $600 billion in the U.S. over the course of President Donald Trump's second term. While the U.S.-EU trade deal finalisation came as a relief for global markets amid heightened uncertainty, the timeline and milestones targeted for the investments are unclear, said ANZ analysts in a note. 'We think the 15% rate will pose headwinds to the Euro area's growth outlook but is unlikely to push the economy into recession.' Meanwhile, top economic officials from the U.S. and China met in Stockholm on Monday for more than five hours of talks to resolve longstanding economic disputes at the centre of a trade war between the world's top two economies. The discussions are expected to resume on Tuesday. Oil market participants are also awaiting the U.S. Federal Open Market Committee meeting on July 29-30, where the Fed iswidely expected to hold rates but could signal a dovish tilt amid signs of cooling inflation, said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova. 'Momentum favors the upside in the near term, but the market is vulnerable to volatility triggered by central bank surprises or a breakdown in trade negotiations,' said Sachdeva. 'The likelihood of an economic slowdown and the Federal Reserve's potential rate cuts remain uncertain, limiting the upside in oil.' Meanwhile, Trump set a new deadline on Monday of '10 or 12 days' for Russia to make progress toward ending the war in Ukraine or face sanctions. Trump has threatened sanctions on both Russia and buyers of its exports unless progress is made.
