UK Stock Market Dips as Miners Fall and Labour Market Data Signals Cooling
Market Overview and Key Drivers
Aug 18 (Reuters) - UK shares fell on Tuesday as metal miners retreated and data pointed to a further cooling in Britain's labour market.
The blue-chip FTSE 100 index was 0.1% lower at 10,711.29 points by 0948 GMT, slipping for the seventh straight session, while the midcap FTSE 250 slipped 0.4% to 24,612.95 points.
Global Economic Factors
• Long-term borrowing costs from the United States to Japan and Germany rose to their highest levels in decades as oil prices rose back above $90 a barrel, fanning inflation worries as U.S.-Iran peace hopes faded.
Commodity and Energy Sector Movements
• Shares of miners Endeavour Mining, Fresnillo and Antofagasta fell about 2% each as gold and copper prices slipped. [GOL/] [MET/L]
• Oil and gas producers Shell and BP rose 1.3% and 1.8% after oil prices rose for a third session as prospects receded for a deal to end the Middle East war, with Iran saying it would adopt a more offensive stance and the U.S. ruling out extending a ceasefire deal, heightening worries about energy supply. [O/R]
UK Labour Market and Inflation Data
Labour Market Trends
• Britain's labour market cooled further in the second quarter, marked by slowing earnings growth in the private sector and the smallest number of vacancies in more than five years, official data showed.
Impact on Monetary Policy
• The data is likely to keep the Bank of England on hold for now, though the central bank has said it may take until year-end to judge whether higher energy prices from the Iran war are feeding into pay settlements.
Consumer Price Trends
• Separately, grocery price inflation eased to its lowest level since October 2024 in August, market researcher Worldpanel by Numerator said, offering more respite to households grappling with elevated living costs.
Stock-Specific Movements
Declines in Japanese Investment Trusts
• Japan-focused investment trusts JPMorgan Japanese and Baillie Gifford Japan Trust dropped 3.3% and 2.6%, respectively, among leading declines on the FTSE midcap index alongside a broader retreat in financial shares. The country's benchmark bond yield was on the brink of hitting a three-decade high just under 3%.
Midcap Gainers
• Among the midcap stocks, shares of IT software provider Kainos Group rose 21% after its fiscal 2027 revenue and adjusted pretax profit forecasts came in "comfortably ahead" of market expectations.
(Anand Gopal and Medha Singh in Bengaluru; Editing by Emelia Sithole-Matarise)
