London close: Stocks weaker as Pelosi touches down in Taipei

(Sharecast News) - London stocks closed in the red on Tuesday as US-China tensions escalated with the arrival of House Speaker Nancy Pelosi in Taiwan, although BP remained a bright spot after well-received second-quarter results. The FTSE 100 ended the session down 0.06% at 7,409.11, and the FTSE 250 was off 1.02% at 19,874.07.

Sterling was mixed against its major trading pairs, last falling 0.22% on the dollar to $1.2223, while it strengthened 0.29% against the euro to €1.1973.

"US markets are leading the losses today, as fears around a potential military escalation with China bring risk-off sentiment back into play," said IG senior market analyst Joshua Mahony.

"While we are still to hear from the remaining 36% of the S&P 500 that are yet to report, the reaction to a largely better-than-expected earnings season has mostly been priced in by this point."

As a result, Mahony said the week so far had seen markets shift focus to the risk posed by the fact that Pelosi landed in Taipei on Tuesday, despite Chinese government warnings.

"Sharp volatility for the dollar-offshore renminbi highlights market uncertainty over how the trip will play out, but ultimately it is likely that this current posturing will soon blow over despite a short-term rise in tensions."

In economic news, UK house prices rose in July at the slowest monthly rate in a year as rising inflation and interest rates took their toll.

According to mortgage lender Nationwide, house prices grew just 0.1% following a 0.2% increase in June, missing expectations of 0.3% growth.

On the year, prices rose 11% in July, up from 10.7% growth the month before, with the average price of a home standing at £271,209, versus £271,613.

"The housing market has retained a surprising degree of momentum given the mounting pressures on household budgets from high inflation, which has already driven consumer confidence to all-time lows," said Nationwide chief economist Robert Gardner.

"While there are tentative signs of a slowdown in activity, with a dip in the number of mortgage approvals for house purchases in June, this has yet to feed through to price growth.

"Demand continues to be supported by strong labour market conditions, where the unemployment rate remains near 50- year lows and with the number of job vacancies close to record highs."

Across the pond, the US jobs market tightened somewhat in June as economic growth slowed, according to a closely-followed survey.

The Department of Labor said the number of job openings fell at a month-on-month pace of 5.4% in June to reach 10.698 million, below consensus expectations for 10.994 million.

Hiring, meanwhile, slipped 2% on the month to 6.374 million.

On London's equity markets, housebuilders were on the back foot after the house price data from Nationwide, with Taylor Wimpey down 6.21%, Barratt Developments off 5.56% and Berkeley Group 4.96% lower.

Fresnillo lost 2.17% after the precious metals miner posted a decline in interim profits mainly due to lower gold volumes sold and a drop in silver prices.

Synthomer tumbled 11.83% after it reported a fall in interim pre-tax profit but struck a confident note on the outlook as it said all businesses had grown apart from the elastomers segment.

Travis Perkins was 9.3% weaker after the hardware retailer said its Toolstation business swung to a loss in the first half as the pandemic boost faded.

Elsewhere, Man Group was down 7.88% and Domino's Pizza Group was off 6.05% after both reported half-year results.

On the upside, BP gushed 2.8% higher after the oil giant said underlying cost replacement profit rose to $8.45bn in the second quarter from $6.25m in the first, coming in well ahead of analysts' expectations of $6.8bn.

That was driven by strong realised refining margins, a continuing "exceptional" oil trading performance and higher liquids realisations, BP said.

Elementis rallied 6.58% after it said its full-year performance was set to be towards the top end of consensus expectations as it hailed good demand.

High Street bakery chain Greggs gained 2.6% after it served up a 22.4% rise in like-for-like sales for the half-year as trading normalised after the lifting of Covid restrictions.

Biffa and Rotork were also trading higher, closing up a respective 11.31% and 1.78%, after results.

Reporting by Josh White at Sharecast.com. Additional reporting by Michele Maatouk, Frank Prenesti and Alexander Bueso.

Market Movers

FTSE 100 (UKX) 7,409.11 -0.06% FTSE 250 (MCX) 19,874.07 -1.02% techMARK (TASX) 4,328.46 -0.62%

FTSE 100 - Risers

BP (BP.) 403.35p 2.80% Standard Chartered (STAN) 581.20p 2.60% National Grid (NG.) 1,147.00p 2.50% Pearson (PSON) 870.00p 2.04% BAE Systems (BA.) 802.20p 1.93% Endeavour Mining (EDV) 1,619.00p 1.76% Severn Trent (SVT) 2,999.00p 1.63% United Utilities Group (UU.) 1,113.00p 1.46% Shell (SHEL) 2,166.00p 1.40% British American Tobacco (BATS) 3,265.50p 1.10%

FTSE 100 - Fallers

Taylor Wimpey (TW.) 120.05p -6.21% Barratt Developments (BDEV) 477.50p -5.56% Berkeley Group Holdings (The) (BKG) 4,085.00p -4.96% Persimmon (PSN) 1,825.00p -4.15% Kingfisher (KGF) 249.40p -3.71% Aveva Group (AVV) 2,259.00p -3.67% Rightmove (RMV) 631.20p -3.57% Abrdn (ABDN) 160.15p -3.50% Howden Joinery Group (HWDN) 657.40p -3.30% Intermediate Capital Group (ICP) 1,469.50p -2.68%

FTSE 250 - Risers

Biffa (BIFF) 401.60p 11.31% Elementis (ELM) 116.70p 6.58% Carnival (CCL) 679.00p 5.93% Indivior (INDV) 327.20p 3.54% Bank of Georgia Group (BGEO) 1,592.00p 3.24% Virgin Money UK (VMUK) 147.70p 2.64% Babcock International Group (BAB) 360.60p 2.62% Greggs (GRG) 2,132.00p 2.60% Apax Global Alpha Limited (APAX) 174.40p 2.59% Johnson Matthey (JMAT) 2,188.00p 2.48%

FTSE 250 - Fallers

Synthomer (SYNT) 207.20p -11.83% Travis Perkins (TPK) 934.20p -9.30% Man Group (EMG) 246.70p -7.88% Bellway (BWY) 2,288.00p -7.14% XP Power Ltd. (DI) (XPP) 2,415.00p -6.76% Domino's Pizza Group (DOM) 273.20p -6.05% IntegraFin Holding (IHP) 260.60p -5.65% Watches of Switzerland Group (WOSG) 836.50p -5.16% Coats Group (COA) 70.80p -5.09% Crest Nicholson Holdings (CRST) 266.60p -4.92%