Global markets slump amid trading caution over US-China tensions

Global markets retreated as traders became increasingly anxious over relations between the US and China.

The London markets fell into the red before a briefing by President Donald Trump, with protests in Hong Kong and Minneapolis both helping to unsettle traders.

The FTSE 100 closed 157.36 points lower at 6,061.43p at the end of trading on Friday.

David Madden, market analyst at CMC Markets UK, said: “Equity traders were worried about the state of US-China relations before President Trump was due to deliver a press conference in relation to the situation.

“Animosity between the two governments has been growing lately as the US are not happy with the way the Beijing administration is treating minority communities.

“In addition to that, the Chinese government are keen to tighten their grip on Hong Kong and that has vexed the US too.”

The major European markets dropped lower during the session after investors were particularly fearful during the start of trading.

The German Dax decreased by 1.34%, while the French Cac moved 1.23% lower.

Across the Atlantic, the Dow Jones slipped but failed to match the level of anxiety shown by its European counterparts.

Nevertheless, worries over trade tensions took the sheen off an otherwise strong week, which had been bolstered by optimism regarding the loosening of lockdown measures.

Meanwhile, sterling suffered a mixed session as UK businesses awaited confirmation on changes to the current Government furlough programme from the Chancellor.

The value of the pound rose 0.11% versus the US dollar at 1.233, and was down 0.28% against the euro at 1.109.

Major multinational firms and travel firms dominated the fallers amid fears regarding the impact of global unrest and trade tensions.

British retailers and retail landlords had a stronger performance, with many pushing higher, as high street stores move closer to reopening their doors again.

In company news, discount retailer group B&M European Value Retail saw shares lift after it posted a surge in DIY and gardening sales as locked-down households snapped up home improvement tools and products.

Bosses at the high street firm said that, in the eight weeks to May 23, like-for-like sales in stores, which have remained open as an “essential” retailer, were up 22.7% compared with a year earlier. Shares moved up 20.3p to 389.7p.

London-listed hostel owner Safestay nudged higher after it said it plans to reopen over the course of the year but with major changes to the experience for customers.

The business, which has nearly 5,000 beds at 20 hostels in the UK and across Europe, said it has been closed since April 1.

Shares in the company rose by 0.5p to 15.5p at the close of play.

The price of oil moved higher after an early dip on account of rising inventories in the US, while there were concerns about Russia’s commitment to the steep production cuts that are in place until the end of June.

The price of a barrel of Brent crude oil increased 1.56% to 35.85 US dollars.

The biggest risers on the FTSE 100 were Ocado, up 89p at 2,191p, British Land, up 10.1p at 407.3p, Auto Trader, up 11.8p at 558.2p, and United Utilities, up 17.6p at 917.6p.

The biggest fallers of the day were Rolls-Royce, down 47.4p at 271.6p, Carnival, down 126.5p at 1,057.5p, Melrose, down 10.7p at 115.15p, and easyJet, down 60p at 680p.

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