LONDON, Sept 25 — London’s FTSE 100 dropped today, with investors fearing that a call by US lawmakers for an impeachment inquiry into President Donald Trump would pile on more political uncertainty to an already fragile global economy.
Trump unleashed a fresh barrage of harsh comments on Beijing’s trade practices yesterday, denting optimism around Sino-US proposed talks and hurting internationally-focussed financials, oil majors and miners, pushing the main index down 0.8 per cent .
If losses hold, the index is headed for its biggest one-day drop since late August.
The FTSE 250 also shed 0.8 per cent by 0803 GMT as more investors focused on the future course of Brexit, with the House of Commons set to reconvene after the Supreme Court ruled on Tuesday Prime Minister Boris Johnson had suspended parliament unlawfully.
“Calls for resignation grow. But nothing has really changed. The only narrative that counts is that there’s elite out there frustrating Brexit at every turn,” Markets.com analyst Neil Wilson wrote about the US and UK political turmoil.
Worries over how, when or even if the UK will leave the European Union have dragged down sterling for most of the year and partly aided consecutive gains in the exporter-laden FTSE 100 in June and July.
Frustration over few signs of tangible progress in the US-China trade talks and a modest recovery in sterling amid lawmakers’ legally-binding moves to prevent a no-deal Brexit have left the main index with meagre gains so far this month.
While the pound was on the back foot after yesterday’s gains that were triggered by the Supreme Court ruling, the FTSE 100 still could not catch a break, indicating that problems ranged far beyond Brexit.
Meanwhile, a mixed bag of company news provided little impetus to indexes.
Sainsbury’s added 2.41 per cent after the supermarket chain laid out a new plan to cut costs, speed up debt reduction and overhaul its store estate and financial services division as it reported better trading in the recent quarter.
Internet-based fashion retailer Boohoo, however, slipped 3.3 per cent as strong results triggered profit-taking in early trading.
United Utilities and its primary rival Severn Trent managed gains of one per cent each after United forecast a strong first-half as it benefited from regulatory incentives.
Babcock climbed 4.5 per cent to a seven-month high after the midcap-listed engineering services group said first-half trading was in line with expectations and stuck to its annual targets, while Aston Martin declined by the same level after a bond issue. — Reuters
