By Callum Keown
London markets were dragged lower on Wednesday by earnings misses and Donald Trump’s increasingly aggressive rhetoric against China.
The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -0.31% dropped 0.6% as its pound-induced rally, halted by Trump’s Twitter attack on China, began to reverse.
What’s moving the markets?
The Mexico-focused mining giant Fresnillo /zigman2/quotes/201300065/delayed UK:FRES -3.15% , which reported a 69% profit fall on Tuesday, continued to drop for a second day, while British wealth manager St James’s Place /zigman2/quotes/200849568/delayed UK:STJ -0.33% slid 5.7% after missing profit forecasts.
Lloyds Banking Group /zigman2/quotes/202285510/delayed UK:LLOY -0.67% , the UK’s biggest mortgage lender, reported weaker than expected pretax profits, dragging down London’s leading index of blue-chip stocks by 0.6%.
U.S. President Donald Trump’s flurry of Tweets attacking China stopped the FTSE rally in its tracks on Tuesday and has continued to plague stocks.
Trump threatened “no deal at all” with China and talks ended in Shanghai early on Wednesday with little sign of a breakthrough.
AJ Bell investment director Russ Mould said: “Donald Trump has done it again after turning aggressive with regards to the trade war with China. “Following a sell-off last night in the U.S., the FTSE 100 has slipped on Wednesday and Asian markets were also flashing red as investors lowered their hopes for an amicable resolution on trade talks,” Mould added.
Which stocks are active?
British retailer Next /zigman2/quotes/200704121/delayed UK:NXT -0.32% defied the high street gloom as full-price sales, including online sales, rose 4% in the second quarter. Next increased its full-year profit guidance by £10 million ($12.2 million) to £725 million, which the company said is a rise of 0.3% on last year. Shares rose 8.4%.
Lloyds Bank dropped 4.6% after the lender was hit by a £550 million charge for the mis-selling of payment protection insurance. The bank’s pre-tax profit for the first half of the year fell 7.1% and it forecast lower returns for the full year.
Housebuilder Taylor Wimpey /zigman2/quotes/208623755/delayed UK:TW -0.93% fell 5.8% after reporting a dip in first-half pre-tax profit and forecasting a drop in annual margins as it warned of rising costs.