By Carla Mozee, MarketWatch
U.K. stocks finished in the negative territory on Tuesday, after a historic meeting between U.S. President Donald Trump and North Korean leader Kim Jong Un produced a pledge that critics said was too broad when it comes to denuclearization in the Korean Peninsula.
The pound swung between gains and losses as investors watched the Brexit debate among British lawmakers. Meanwhile, British wage-growth figures fell slightly short of expectations.
How markets performed
After opening higher, the FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +0.82% began to retreat in early moves and finished down by 0.4% at 7,703.81. Basic materials and oil-and-gas groups fared the worst, but the utility sector put in the best performance. On Monday, the London benchmark rose 0.7%.
The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.3959% shook off earlier losses and rose to $1.3420. That’s higher than $1.3380 late Monday in New York. Against the euro /zigman2/quotes/210561278/realtime/sampled GBPEUR -0.0868% , sterling fetched €1.1382, up from €1.1354 in the prior session.
What’s driving markets
U.K. stocks turned lower with the broader European equity market /zigman2/quotes/210599654/delayed XX:SXXP +0.67% as the summit between U.S. and North Korea was wrapping up in Singapore. The meeting was notable as it was the first between a U.S. sitting president and a North Korean leader.
Trump and Kim signed a joint document pledging to work toward the complete denuclearization of the Korean Peninsula, but the statement was criticized as lacking detail on the verification of the process. The document doesn’t use the words “irreversible” and “verifiable” to describe the denuclearization process, two things the U.S. has long pursued.
“While the display of a bromance between the two leaders is a welcome development, boding well for future negotiations, the agreement they signed contained very little in the way of substance. The suspicion is that today was more of a distraction from serious issues for the global economy—notably concerning trade—still looming in the background,” wrote Silvia Dall’Angelo, senior economist at Hermes Investment Management, in a note.
Dall’Angelo said the U.S. was still preparing to put tariffs of 25% on $50 billion of Chinese goods. A final list of goods is expected to be released Friday. Meanwhile, the European Union will respond to U.S. levies on steel and aluminum imports, German Chancellor Angela Merkel said this week.
The “uncertainty concerning trade policies has the potential to negatively affect confidence, in turn hold back investment decisions,” Dall’Angelo said.
Meanwhile, the pound turned higher in a busy day for traders as lawmakers in the lower House of Commons debated amendments from the upper House of Lords to the bill that takes the U.K. out of the European Union.
The 15 amendments include a measure to keep the country in the EU’s customs union. The pound rose after lawmakers late Tuesday rejected two separate amendments proposed by the upper house, considered a win for the government.
Prime Minister Theresa May’s Conservative government still runs the risk of losing its bid to overturn some of the amendments if enough Conservative lawmakers decide to vote alongside opposition parties. Justice Minister Phillip Lee resigned Tuesday, citing the government’s handling of the U.K.’s pending exit from the EU.