London stocks log declines as losses in miners weigh

Pranav Kashyap and Purvi Agarwal
Updated ·2-min read
FILE PHOTO: The outside of the London Stock Exchange building is seen in the City of London.

By Pranav Kashyap and Purvi Agarwal

(Reuters) -London stocks closed lower on Tuesday, weighed down by resources stocks tracking a fall in commodity prices, while investors assessed the chance of U.S. rate cuts against a backdrop of faltering manufacturing activity.

The blue-chip FTSE 100 index was down 0.4%. The mid-cap FTSE 250 dropped 0.9% after three straight sessions of gains.

Declines in the market were led by precious metal miners, which slumped 3.8% in their worst day in over a month, after gold prices retreated more than 1% on a firmer dollar. [GOL/]

Heavyweight energy stocks like BP and Shell fell 3.8% and 2.1% respectively, after ratings agency S&P Global revised lower BP's credit outlook and oil prices slipped by more than 1%. [O/R]

The oil and gas sector logged its worst day since January 2024.

On the bright side, utilities stocks gained 2.0%, the most among their peers.

Investors weighed a potential September rate cut by the Federal Reserve as U.S. manufacturing activity dipped for a second month, and American job openings fell more than expected, according to the JOLTS report.

"There has been a wave of not (so) strong economic data out of the U.S. None of them have us worried about being in the middle of a recession, but they are pointing to a slowing economy," said Patrick Armstrong, chief investment officer at Plurimi Wealth.

However, focus returned to the European Central Bank, which is due to meet on Thursday and is expected to trim interest rates by 25 basis points.

Optimism around the ECB rate cut had propelled London stocks to close higher on Monday.

"Markets are pulling back some of the cuts priced in for the ECB over recent days. June is locked in, but how many more cuts will be coming after that?" Armstrong said.

Carnival Plc was the top gainer on the mid-cap index with a 7.3% jump after Peel Hunt upgraded the stock to "buy" from "add".

(Reporting by Pranav Kashyap and Purvi Agarwal in Bengaluru; Editing by Sonia Cheema, Mrigank Dhaniwala and Mark Heinrich)

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