By Dave Morris
London markets ticked down Tuesday as Conservative Party leadership frontrunner Boris Johnson’s campaign floundered.
How did markets perform?
The U.K.’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.85% was 0.2% lower at 7,399.2. On Monday it nudged up 0.1%.
The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.0077% is down 0.2% to $1.2759, erasing Monday’s rise of 0.2%.
What’s moving the markets?
Former U.K. Foreign Secretary Boris Johnson faced rising scrutiny as he campaigned for leadership of the Conservative Party. Johnson, who most pundits and polls expect to become the next Prime Minister, hit back against reports of domestic turmoil with his girlfriend, Carrie Symonds, saying it was none of the public’s business. Scrutiny of his policy platform may prove more damaging if it costs him supporters such as the Institute for Fiscal Studies think tank, which said according to a report in the Financial Times that Johnson’s plan to cut taxes and raise the national insurance contributions threshold was incompatible with ending austerity, as the Conservative government has promised to do.
U.K. retail sales saw their largest year over year decline in a decade, though economists warn that seasonal factors may have driven up the 2018 comparison figure. The CBI monthly retail sales balance figures fell to -42 versus consensus expectations of -10. However, the CBI notes that 2018 was not only the season of the men’s World Cup, it also saw particularly warm weather.
Negotiators for the U.S. and China were preparing the ground for a meeting between U.S. President Donald Trump and Chinese President Xi Jinping at the G-20 summit in Osaka, Japan. The discussion will be the first time the two have come face-to-face since trade negotiations ended in May without a deal. Representatives of the two sides have exchanged phone calls though details of what they discussed are scarce.
In other economic data, France saw its June survey of the business climate for manufacturing fall short of expectations, coming in at 102 revised versus 103.5 expected.
Which stocks are active?
Miners were in positive territory as the prices of several metals rose to multi-year highs. Gold futures touched $1,438 an ounce, a six year high, before settling at $1432.6/oz. The shiny metal has been boosted by uncertainty around the strength of the global economy and possible central bank action. Meanwhile, the Financial Times reports that supply constraints in the iron ore market have sent it to a five-year high of $108.78. BHP Group PLC /zigman2/quotes/203323256/delayed UK:BHP +2.30% shares were 1.2% higher, Anglo American PLC /zigman2/quotes/201381512/delayed UK:AAL +3.22% rose 0.7% and Rio Tinto PLC /zigman2/quotes/208934945/delayed UK:RIO +2.75% shares were up 0.5%.
The poor U.K. retail data struck shares in supermarkets Tesco PLC /zigman2/quotes/203761082/delayed UK:TSCO +1.47% was down 2.3%, while Wm Morrison Supermarkets PLC /zigman2/quotes/205533138/delayed UK:MRW +1.38% declined 2%.