FTSE 100 dips as sentiment cools on US-China trade tensions

The FTSE 100 slipped into the red after slumping in the afternoon session on the back of cooling sentiment from traders.

The European markets were in positive territory for large parts of the day before drifting lower after US trade officials raised concerns over tensions with China.

London’s top flight closed 11.71 points lower at 6,472.59p at the end of trading on Monday.

David Madden, market analyst at CMC Markets UK, said: “The indices stated off in the red, but as the day went on sentiment turned positive.

“But equity benchmarks traded lower after Peter Navarro, US trade advisor, claimed that China are trying to steal US vaccines via intellectual property theft.

“The adviser to the Trump administration soured the fragile sentiment in stocks, as the commentary could lead to a renewed increase in US-China tensions.”

The major European markets all dipped marginally as traders appeared cautious about US-China trade tensions and plans to unwind lockdown restrictions.

The German Dax decreased by 0.22%, while the French Cac moved 0.43% lower.

Across the Atlantic, the Dow Jones moved higher despite Mr Navarro’s comments as the well-received jobs report from Friday continued to play on traders’ minds.

Meanwhile, sterling moved higher as it partly benefited from weakness in the US dollar.

The value of the pound rose 0.2% versus the US dollar at 1.130, and was up 0.15% against the euro at 1.123.

Pharmaceutical giant AstraZeneca helped to weigh down the FTSE 100 as shares dipped following weekend reports after speculation over a £216 billion mega-merger with Gillead was dampened.

Sources told Bloomberg that AstraZeneca, which is leading the global race to manufacture the first coronavirus vaccine in a partnership with Oxford University, had informally approached Gilead about a potential tie-up last month. Shares moved 227p lower to 8,200p on Monday.

Meanwhile, BP shares moved higher as the UK oil giant announced a major new strategy which will see the firm cut 10,000 of its global workforce in a bid to cope with the impact of coronavirus.

The company said the move will “significantly impact senior levels” of management in the business, with its top leadership roles to be cut by a third.

Shares in BP closed 3.5p higher at 365.75p at the end of trading.

Elsewhere in company news, Mulberry shares dipped after the fashion brand said it plans to cut around a quarter of its workforce.

It fell by 6.5p to 189.5p at the close of play after it warned it expects social distancing measures, lower footfall and fewer tourists to continue to hit revenues.

Elsewhere, car dealership Lookers saw shares fall after warning investors they might be unable to buy and sell its shares from the beginning of July, after it discovered a potential fraud on its books. It dropped by 6.9p to 24.6p.

The price of oil retreated from a three-month high after OPEC decided to continue with very deep production cuts.

The price of a barrel of Brent crude oil increased 2.1% to 40.98 US dollars.

The biggest risers on the FTSE 100 were Rolls-Royce, up 42.5p at 398.4p, Carnival, up 142p at 1,573.5p, BT Group, up 6.4p at 126.35p, and Barratt, up 29p at 579.2p.

The biggest fallers of the day were Ocado, down 139.5p at 1,983.5p, Melrose, down 8.5p at 140.45p, Intermediate Capital Group, down 70p at 1,348p and CRH, down 112p at 2,817p.