FTSE 100 suffers weakest week in six amid US-Iran talks, political uncertainty
Market Performance and Key Drivers
June 19 (Reuters) - UK shares fell on Friday as U.S.-Iran tensions and political uncertainty dampened risk appetite, sealing a weekly decline for both blue-chip and mid-cap indexes.
FTSE 100 and FTSE 250 Weekly Movements
The FTSE 100 ended down 0.4%, at 10,363 points, losing 1% on the week, the steepest weekly loss since early May. The FTSE 250 midcap index fell 0.6%, down 0.5% for the week.
Sector Performance
• Miners weighed on the index, with Anglo American and Rio Tinto dropped 2.6%, each and Glencore declined 1.6%. Precious metals miner Fresnillo shed about 4.6%.
• Energy stocks were the main source of support. BP rose 2.8% and Shell gained 1.1%, as crude prices ticked higher.
Global Influences
• Global shares fell, while oil prices got a boost after Washington and Tehran called off peace talks, which traders had hoped would ease supply risks around the Strait of Hormuz.
Political and Economic Factors
Political Uncertainty in the UK
• Meanwhile, Labour mayor Andy Burnham cleared a path on Friday to ousting British Prime Minister Keir Starmer, potentially ushering in a new bout of political instability.
Market Reactions to Political Developments
• "The strength of his (Burnham's) mandate may determine how far he might go with anything one might call a market-unfriendly approach – i.e., higher borrowing, redistributive wealth taxes, etc," said Saxo UK Investor Strategist Neil Wilson.
• British government bond yields rose to a one-week high increasing slightly more than those for German debt, after higher-than-expected borrowing numbers and Burnham's election victory.
Bank of England Policy
• The Bank of England held rates at 3.75% on Thursday but the vote split to 7-2 from 8-1 in April, with two members now backing a hike. The hawkish tilt pushed gilt yields to a one-week high.
Company-Specific News
Admiral Group
• British insurer Admiral Group slipped 3.2% after RBC downgraded the stock to "sector perform" ahead of results.
Barratt Redrow
• Barratt Redrow named former British Airways finance chief Rebecca Napier as its new chief financial officer. The homebuilder's shares dropped 1%.
Entain
• Reuters reported the Ladbrokes-owner Entain has begun exploring options for its joint venture in Central and Eastern Europe, including a possible sale. Stock fell 1.2%.
Reporting Credits
(Reporting by Medha Singh in Bengaluru; Editing by Eileen Soreng)
