London’s FTSE 100 closed lower on Tuesday, surrendering early gains after briefly breaking through the 9,000-point barrier for the first time in its history. A hotter US inflation reading knocked sentiment, casting fresh doubt on the likelihood of interest rate cuts.
The FTSE 100 ended down 0.7% at 8,938.32, having earlier peaked at 9,016.98 in morning trade. The FTSE 250 fell 0.2% to 21,690.46 and the AIM All-Share declined 0.4% to 771.03.
European markets were also weaker. In Paris, the CAC 40 lost 0.5%, while Frankfurt’s DAX 40 also fell 0.5%.
US stocks were mixed by the London close. The Dow Jones fell 0.6%, the S&P 500 edged up 0.1%, and the tech-heavy Nasdaq rose 0.7%, helped by a rebound in tech shares.
The latest US inflation figures showed consumer prices rising in line with expectations, though still running hotter than markets would like. Annual CPI accelerated to 2.7% in June from 2.4% in May, while monthly inflation rose to 0.3% from 0.1%. Core CPI, which excludes food and energy, ticked up to 2.9%.
The report showed tariffs are beginning to be passed on to US consumers, dampening hopes for rate cuts by the Federal Reserve.
Barratt Redrow shares fell sharply, losing 9.1%, after it flagged lower sales volumes and planning delays in London. Home completions fell below expectations and analysts warned of a likely round of earnings downgrades. The cautious update dragged down sector peers, with Persimmon closing 2.2% lower and Taylor Wimpey slipping 2.5%.
B&M European Value Retail tumbled 9.1% after reporting weaker-than-expected UK like-for-like sales growth. Despite first-quarter revenue rising 4.4% year-on-year to £1.41 billion, UK sales rose just 1.3%, missing investor hopes for closer to 3%.
Experian gained 4.3% after reporting a strong first quarter. The credit-checking agency posted 12% revenue growth, supported by strong demand in North America and modest improvements in its UK business.
In the US, chipmaker Nvidia rallied 4.4% after saying it had secured assurances from the US government to resume exports of a key AI product to China, easing trade concerns in the tech sector.