Financial stocks drag FTSE 100 lower but records best month since April

By Devik Jain and Amal S

(Reuters) – London’s FTSE 100 ended lower on Tuesday, mainly due to weakness in financials and commodity-linked stocks, although the blue-chip index posted its best month since April.

The FTSE 100 fell 0.4% to its worst session in nearly two weeks, weighed by a 1.4% drop in banks, while both energy and miners were down 1.5% and 0.3% respectively.

“We’ve seen a bit of a pullback in the commodities. And there may be a little bit of profit-taking in the market after Powell’s dovish comments on Friday and now we’re just seeing a corrective move on that,” said Craig Erlam, senior market analyst at Oanda, referring to comments by the head of the U.S. Federal Reserve, Jerome Powell, on stimulus tapering.

UK markets were closed on Monday for a public holiday.

The FTSE 100 has gained about 10.2% so far this year, but continues to lag its European and U.S. peers as a resurgence in coronavirus cases across the world has sparked concerns of a slowdown in global economic growth.

However, the blue chip index ended August up 1.2%, its best monthly performance since April, helped by solid earnings and easing fears about early tapering of central bank support.

“There’s no strong determination for central banks to pull back stimulus at this point and that kind of put market in a healthy position going into next couple of months,” Erlam added.

Investors now await Markit/CIPS business activity data for August due later this week.

Bunzl Plc fell 1.6% and was among the top drags after the business supplies distributor flagged supply chain disruptions, product shortages and a labour crunch in certain markets including Mexico, Australia and Britain.

London markets’ monthly performance https://fingfx.thomsonreuters.com/gfx/mkt/xmpjooxokvr/FTSE%20monthly.png

The domestically focussed mid-cap index climbed 0.2% hitting a record high and marked its best month since December.

Among other stocks, Blue Prism Group gained 32.2% after the British automation software company said it was in talks with American private equity firms TPG Capital and Vista Equity Partners over a possible offer.

Weir Group jumped 3.8% to the top of FTSE 100 after Peel Hunt upgraded the engineering company to “buy” from “hold”.

(Reporting by Devik Jain and Amal S in Bengaluru; Editing by Subhranshu Sahu)

By Devik Jain and Amal S

(Reuters) – London’s FTSE 100 ended lower on Tuesday, mainly due to weakness in financials and commodity-linked stocks, although the blue-chip index posted its best month since April.

The FTSE 100 fell 0.4% to its worst session in nearly two weeks, weighed by a 1.4% drop in banks, while both energy and miners were down 1.5% and 0.3% respectively.

“We’ve seen a bit of a pullback in the commodities. And there may be a little bit of profit-taking in the market after Powell’s dovish comments on Friday and now we’re just seeing a corrective move on that,” said Craig Erlam, senior market analyst at Oanda, referring to comments by the head of the U.S. Federal Reserve, Jerome Powell, on stimulus tapering.

UK markets were closed on Monday for a public holiday.

The FTSE 100 has gained about 10.2% so far this year, but continues to lag its European and U.S. peers as a resurgence in coronavirus cases across the world has sparked concerns of a slowdown in global economic growth.

However, the blue chip index ended August up 1.2%, its best monthly performance since April, helped by solid earnings and easing fears about early tapering of central bank support.

“There’s no strong determination for central banks to pull back stimulus at this point and that kind of put market in a healthy position going into next couple of months,” Erlam added.

Investors now await Markit/CIPS business activity data for August due later this week.

Bunzl Plc fell 1.6% and was among the top drags after the business supplies distributor flagged supply chain disruptions, product shortages and a labour crunch in certain markets including Mexico, Australia and Britain.

London markets’ monthly performance https://fingfx.thomsonreuters.com/gfx/mkt/xmpjooxokvr/FTSE%20monthly.png

The domestically focussed mid-cap index climbed 0.2% hitting a record high and marked its best month since December.

Among other stocks, Blue Prism Group gained 32.2% after the British automation software company said it was in talks with American private equity firms TPG Capital and Vista Equity Partners over a possible offer.

Weir Group jumped 3.8% to the top of FTSE 100 after Peel Hunt upgraded the engineering company to “buy” from “hold”.

(Reporting by Devik Jain and Amal S in Bengaluru; Editing by Subhranshu Sahu)