London stocks opened on the back foot on Tuesday, with trade war nerves weighing on sentiment ahead of the start of the US banking earnings season.
The FTSE 100 was down 0.3% at 9,413.78, the FTSE 250 slipped 0.5% to 21,952.21, and the AIM All-Share was down just 0.16 of a point at 792.31.
In the UK, a rise in the jobless rate and mixed pay data sent the pound below $1.33, while gold continues to appreciate.
China ramped up retaliation against the US trade investigation, reigniting fears of a fresh escalation. Beijing said it was ready to “fight to the end” after President Donald Trump announced plans to impose an additional 100% tariff on Chinese goods.
“On the matter of tariff wars and trade wars, China’s position remains consistent,” an unnamed commerce ministry spokesperson said. “If you wish to fight, we shall fight to the end; if you wish to negotiate, our door remains open.”
Concerns grew over the weekend that tensions between the world’s two largest economies could worsen after Trump’s tariff threat.
In the UK, the unemployment rate unexpectedly rose in the three months to August. According to the Office for National Statistics, the rate increased to 4.8% from 4.7%, missing expectations for it to stay unchanged. Payrolled employees fell by 93,000 year-on-year in August but rose slightly on the month.
Vacancies continued their steady decline, falling for the 39th consecutive period to 717,000 in the three months to September. Regular pay growth eased to 4.7%, while total pay growth surprisingly accelerated to 5.0%.
easyJet was the best large-cap performer, jumping 7.2% after Italian daily Corriere della Sera reported that Mediterranean Shipping Co was among those considering investing in or taking full control of the airline. MSC is said to be working with an investment fund and has also looked at Spirit Airlines and TAP Air Portugal as alternatives.
Housebuilders traded higher, with Bellway up 5.4% and Persimmon rising 3.0%. Bellway reported a 21% rise in annual pretax profit to £221.9 million, with revenue up 17% to £2.78 billion. The company raised its final dividend by 29% to 49p and announced a £150 million share buyback.
Despite the upbeat figures, Bellway said weak consumer sentiment persisted and that affordability constraints and uncertainty over potential tax changes were affecting demand.
Fevertree gained 4.7% after Jefferies upgraded the stock to “buy” from “hold.”