By Callum Keown
London markets retreated on Wednesday as trade talks between the U.S. and China hit a Huawei hurdle and the pound rebounded on strong U.K. retail sales.
The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.02% slid 0.3% as Wall Street losses on Wednesday and trade war concerns were felt across the pond.
Commodity stocks, including oil majors BP and Shell, continued to fall following signs of easing tensions between the U.S. and Iran.
The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.3961% recovered from recent lows, rebounding 0.3% to $1.247, due to surprisingly strong U.K. retail sales in June as Brits hunted charity shops for bargains.
What’s moving the markets?
Trade talks between the U.S. and China have stalled as the Trump administration weighs up what to do about Huawei, The Wall Street Journal reported.
Beijing has demanded the U.S. ease restrictions on the Chinese telecommunications giant but U.S. officials are undecided.
Wall Street lost further ground on Wednesday after Netflix reported a drop in subscribers and IBM also posted a revenue slide.
Speaking to MarketWatch, Connor Campbell, Spreadex analyst said the Huawei hurdle had cast a “red cloud” over the FTSE over fears the fragile truce between the U.S. and China could unravel.
He said: “The U.K. index was specifically harmed by the uniform losses in its commodity stocks. BP and Shell looked rough, falling 1.8% and 1% respectively as they continued to process the apparent easing of tensions between the U.S. and Iran.”
Which stocks are active?
EasyJet /zigman2/quotes/202825892/delayed UK:EZJ +2.25% shares climbed 3.2% after the low-cost airline reported an 11% sales jump to £1.76bn in the third quarter, led by a spike in late bookings for the summer and a strong Easter performance.
Oil and gas giant BP /zigman2/quotes/202286639/delayed UK:BP +0.44% continued its descent, falling 1.8% and Shell /zigman2/quotes/206428183/delayed UK:RDSA -0.43% also lost 0.7% despite crude prices rebounding slightly. The oil majors have suffered in recent days after Donald Trump signalled that relations with Iran were set to improve.
Online fashion giant ASOS /zigman2/quotes/209092221/delayed UK:ASC +0.04% plunged 15.3% after the retailer issued a profit warning. The company said sales growth had been stunted by problems at its warehouses and that profit for the year was now expected to be £30-35m, down from previous forecasts of £55m.