British stock markets fell Wednesday as US President Donald Trump showed little sign of negotiating trade with China in his State of the Union address, while Ocado fell sharply after a fire broke out in its flagship distribution center.
Document photo: The sign appears outside the entrance of London Stock Exchange. August 23, 2018. Reuters / Peter Nicholls
The FTSE 100 index fell 0.3%, ending a six-day run of gains, while the FTSE 250 index rose 0.2% at 0937 GMT.
As crude oil prices fell, BP led the main stock index after strong results Tuesday, up more than 5%, falling along with other oil stocks. Strong sterling and optimistic quarterly reports from CYBG, owner of Clydesdale Bank, boosted the index.
Trump's renewal of $5.7 billion (4.4 billion) to build the U.S. -Mexico border wall has raised fears of a reopening of the U.S. government, which has helped to stagnate Asian stock markets overnight.
However, Jasper Lawler, an analyst at London Capital Group, said there was nothing "too shocking to cause any risk aversion in the address".
"What we see is only a little weakness, giving some benefits... more like profit-taking than any new factor."
Ocado, an online retailer, fell 8% and is expected to have its worst day in more than five months after the company said the Andover Automation Distribution Center fire could affect sales growth.
Investors also sold British financial shares after BNP Paribas, France's largest listed bank, cut its 2020 target. GlaxoSmith Kline fell 1.6% before its full-year results were announced later Wednesday.
Midcap CYBG, a newly emerging challenger for Britain's big retail banks, surged 14% after reporting an increase in lending in the first quarter - the best intraday earnings ever.
The market is awaiting a meeting of the Bank of England (BoE) on Thursday, and it is expected that Governor Mark Carney and his peer interest rate makers will continue to maintain borrowing costs.
"What you want to see is that the Bank of England acknowledges that wage pressures are actually increasing and inflation is reaching or higher than its target, so if uncertainty about Britain's withdrawal from Europe diminishes or disappears, they can start tightening policy," Laurel said.
"But I suspect we may not do that... The Bank of England does not want to issue any form of austerity policy, and Britain's exit from Europe is still in full swing."
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