London close: Nervous traders take profits amid US-China trade frictions
Stocks reversed course shortly after noon, forfeiting some of the prior session's big gains after the US President accused China of backtracking on its pledges to purchase more agricultural commodities from his country, even as trade officials from both countries were due to meet again in Shanghai for two days of negotiations.
In messages posted to his personal account on Twitter, Trump warned Beijing that waiting to see the result of the next US presidential elections could result in his pushing for harder terms or even no deal ever being reached.
Nevertheless, expectations for a resolution of the trade spat were already quite low.
Commenting on the situation in markets, IG's Josh Mahony said: "European and US markets are on the slide today, with the DAX leading the losses amid a decline of over 2%.
"With the huge sterling declines helping prop up the FTSE 100, it is left to mainland European markets to reflect the pessimistic sentiment that surrounds today’s US-China trade talks."
By the end of trading, the FTSE 100 had given back 0.52% to trade at 7,646.77, with the pound trading lower by 0.53% alongside to 1.0905 against the single currency and by 0.56% to 1.2158 versus the US dollar.
Weighed down by the new government's insistence on risking a no-deal Brext, it was the first time since March 2017 that Sterling had traded below the 1.22 mark versus the Greenback.
To take note of, the main equity indices across the Channel saw even sharper selling on the back of weaker than expected readings on Swedish and French second quarter GDP and amid Brexit-related worries.
Stateside meanwhile, data out on Tuesday showed US consumer confidence jumping back to its highest levels year-to-date in July and inflation running a tad lower than economists had anticipated in June as US Federal Reserve's two day policy meeting got under way.
And in Japan, overnight the Bank of Japan lowered its GDP and inflation forecasts for the current financial year and the next and said that it would "not hesitate to take additional easing measures" if warranted.
Some analysts confident on BP, Centrica and Fresnillo pummeled
BP shares paced gains on the top flight index from the get-go on Tuesday after the oil major posted better than expected second quarter profits on the back of higher output, with strength in Upstream helping to offset weakness in Downstream.
Despite the outfit's high dividend yield of 6.22% and some analysts' concerns around its level of gearing, others sounded a more upbeat note, including those at Morgan Stanley, who reiterated their 'overweight' stance and 620.0p target price for the shares following BP's latest update.
Going the other way, Centrica and Fresnillo were both clobbered after slashing their dividend payouts.
Centrica recorded a statutory loss before tax of £446m for the six months ended 30 June, swinging from a profit of £704m during the same point last year, which the company blamed on the new energy price cap and increased pensions contributions as it slashed its interim dividend by 58% to 1.5p.
In parallel, precious metals miner Fresnillo posted what analysts at ShoreCap termed a pitiful net attributable interim profit of $70.9m which was down from $229.3m one year ago, while the interim divi was cut from 10.7 US cents to 2.6 cents.
Other notable movers to the downside on the top flight index included RBS and IAG, with the both felled by traders' jitters around the new course set by Westminster on Brexit.
In the case of the former, markets were also looking ahead to the Bank of England's policy meeting two days later, although Diageo which is often seen as a so-called dividend proxy advanced.
For Rolls Royce and BAE Systems meanwhile weakness in the pound was proving a fillip.
A rally in defensive issues such as British American Tobacco and Imperial Brands stalled at technical resistance.
Shares of Just Eat were on the back foot after online food delivery outfit Delivery Hero's boss, Niklas Oestberg, doused speculation that it might launch a counter-offer for UK rival Just Eat.
Meanwhile, out on the second-tier index ...
CYBG, which owns the Clydesdale and Yorkshire Bank brands as well as Virgin Money and 'B', led the fallers after it warned that net interest margins were likely to be at the lower end of earlier forecasts as it faced tough competition in mortgage lending.
"While CYBG is not a stock to set pulses racing, we do believe it is a worthy investment due to the high degree of self-help that is embedded in financial forecasts. Specifically, we think that significant merger and digital transformation-related cost synergies should help to mitigate the impact of broader competitive and economic pressures, while a well capitalised balance sheet could see surplus returned to shareholders in the longer-term," said analysts at Shore Capital.
Precision instrument maker Spectris also struggled as it said first half revenues were flat as the US–China trade spat impacted results.
Greggs lost ground as it said second half growth will be more subdued amid tougher comparative figures and warned that overall cost inflation is now set to be at the higher end of full year expectations, though the bakery chain rewarded investors with a special dividend after first half growth was driven by its famous vegan sausage roll.
Weir Group dropped as it reported that "challenging conditions" in the North American oil and gas market weighed on results, with interim operating profits and revenues coming in lower, while convenience foods manufacturer Greencore edged downwards as lower third quarter revenues reflected the impact of site disposals and business exits.
Market Movers
FTSE 100 (UKX) 7,646.77 -0.52%
FTSE 250 (MCX) 19,774.82 -0.56%
techMARK (TASX) 3,890.23 -0.52%
FTSE 100 - Risers
BP (BP.) 543.20p 3.07%
Micro Focus International (MCRO) 1,756.80p 2.09%
JD Sports Fashion (JD.) 648.40p 1.69%
Taylor Wimpey (TW.) 176.55p 1.26%
Diageo (DGE) 3,448.50p 1.07%
Rio Tinto (RIO) 4,728.50p 1.00%
NMC Health (NMC) 2,524.00p 0.88%
InterContinental Hotels Group (IHG) 5,744.00p 0.81%
Smith & Nephew (SN.) 1,862.50p 0.78%
Spirax-Sarco Engineering (SPX) 9,030.00p 0.61%
FTSE 100 - Fallers
Centrica (CNA) 73.58p -19.00%
Fresnillo (FRES) 653.60p -17.74%
International Consolidated Airlines Group SA (CDI) (IAG) 414.80p -5.43%
Imperial Brands (IMB) 2,093.00p -4.45%
British American Tobacco (BATS) 2,978.00p -4.12%
Royal Bank of Scotland Group (RBS) 220.30p -4.01%
Just Eat (JE.) 750.00p -3.85%
Reckitt Benckiser Group (RB.) 6,455.00p -3.22%
Melrose Industries (MRO) 188.80p -2.98%
Pearson (PSON) 895.60p -2.88%
FTSE 250 - Risers
Sanne Group (SNN) 567.00p 13.86%
Elementis (ELM) 147.50p 10.40%
Aggreko (AGK) 836.60p 7.67%
4Imprint Group (FOUR) 2,800.00p 6.46%
BBA Aviation (BBA) 323.00p 6.18%
Provident Financial (PFG) 437.20p 5.22%
Future (FUTR) 1,146.00p 3.24%
Ted Baker (TED) 932.99p 3.05%
Ascential (ASCL) 397.60p 2.69%
Plus500 Ltd (DI) (PLUS) 625.60p 2.39%
FTSE 250 - Fallers
CYBG (CYBG) 179.90p -9.55%
Metro Bank (MTRO) 370.20p -6.75%
Intu Properties (INTU) 70.08p -6.34%
Greggs (GRG) 2,236.00p -6.21%
Spectris (SXS) 2,593.00p -5.61%
Hunting (HTG) 513.50p -5.08%
Aston Martin Lagonda Global Holdings (AML) 568.00p -4.63%
Balfour Beatty (BBY) 206.00p -4.63%
Weir Group (WEIR) 1,492.50p -4.42%
Hammerson (HMSO) 240.00p -4.38%