London open: Mining stocks weigh on UK markets

UK stocks retreated on Tuesday morning, with the heavyweight mining sector providing a drag, as investors treaded ahead of the start of earnings season for blue chip tech names in the United States.

The FTSE 100 was down 0.4% at 8,165 within the first hour of trade, pulling back after a 0.5% gain the previous session.

US markets performed well overnight, though nerves were starting to set in ahead of the start of the quarterly reporting season across Wall Street's heavyweight tech sector with Tesla and Google due to release their results after the closing bell on Tuesday evening.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said the earnings "could shift the wind in either direction". Ozkardeskaya said: "The risk is, given the sky-high Big Tech valuations, any delay in AI revenue, any unpleasant detail, or any misstep could have a sector-wide negative impact and lead to a rapid selloff in AI-related stocks."

The economic data calendar was looking relatively quiet across the UK and Europe, while existing home sales and the Richmond Fed manufacturing index was the only major releases due out in the US in afternoon trade.

Meanwhile, market participants were starting to looking ahead to some key US inflation data due out later in the week, with the personal consumption expenditures index for June scheduled for Friday. Inflation as measured by the PCE index – the Federal Reserve's preferred gauge of price pressures – is tipped to have eased to an annual rate of 2.4% from 2.6% in May, with the core rate slowing to 2.5% from 2.6%.

"The upcoming inflation data could have a significant impact on interest rate expectations, with the US Fed widely anticipated to lower rates by a quarter point in September," said analyst Patrick Munnelly from Tickmill.

Compass and Beazley jump, miners falls

Compass Group was a high riser, gaining 3% after boosting its full-year guidance following a bumper third quarter, in which the world’s largest catering company saw organic revenues rise 10.3%. It now expects to grow underlying profit and organic revenues above previous projections of 15% and 10%, respectively.

Insurance group Beazley also gained after reassuring investors that the ongoing IT outage linked to cyber firm CrowdStrike should not affect its profitability. "Based on what is known at this point, the event will not change the current undiscounted combined ratio guidance of low-80s for the full year," the company said.

Heading lower were mining stocks, as silver, copper and iron ore prices struggled, with an interest-rate cut in China failing to excite commodities markets the previous session. Glencore, Anglo American, Fresnillo and Rio Tinto were all nursing losses.

Anglo American was also lower after saying that its South Africa-based iron ore mining subsidiary delivered a "solid" performance for the first half of the year, though macro and logistics environment were said to be "challenging".

Market Movers

FTSE 100 (UKX) 8,165.26 -0.41%
FTSE 250 (MCX) 21,115.68 -0.11%
techMARK (TASX) 4,773.15 -0.16%

FTSE 100 - Risers

Compass Group (CPG) 2,258.00p 3.06%
Smurfit Westrock (DI) (SWR) 3,694.00p 2.36%
Beazley (BEZ) 662.50p 1.92%
Entain (ENT) 663.20p 1.10%
CRH (CDI) (CRH) 6,328.00p 0.96%
Flutter Entertainment (DI) (FLTR) 15,670.00p 0.93%
easyJet (EZJ) 429.10p 0.66%
Ashtead Group (AHT) 5,324.00p 0.49%
Pearson (PSON) 1,029.00p 0.24%
Sage Group (SGE) 1,051.50p 0.19%

FTSE 100 - Fallers

Glencore (GLEN) 434.90p -1.91%
Anglo American (AAL) 2,195.50p -1.72%
M&G (MNG) 203.60p -1.50%
Rio Tinto (RIO) 4,875.50p -1.40%
Croda International (CRDA) 4,019.00p -1.30%
Marks & Spencer Group (MKS) 316.00p -1.25%
Severn Trent (SVT) 2,484.00p -1.23%
United Utilities Group (UU.) 1,006.50p -1.03%
Burberry Group (BRBY) 712.40p -1.03%
Rolls-Royce Holdings (RR.) 438.90p -0.99%

FTSE 250 - Risers

Indivior (INDV) 817.50p 3.22%
Me Group International (MEGP) 190.00p 3.04%
SThree (STEM) 430.50p 2.99%
Crest Nicholson Holdings (CRST) 262.20p 2.18%
Lancashire Holdings Limited (LRE) 621.00p 1.97%
Genuit Group (GEN) 497.00p 1.84%
NextEnergy Solar Fund Limited Red (NESF) 83.45p 1.64%
Hammerson (HMSO) 30.46p 1.53%
JTC (JTC) 1,070.00p 1.52%
BBGI Global Infrastructure S.A. NPV (DI) (BBGI) 140.00p 1.30%

FTSE 250 - Fallers

Pets at Home Group (PETS) 302.20p -2.07%
Kainos Group (KNOS) 1,060.00p -1.49%
Pennon Group (PNN) 648.50p -1.44%
Aston Martin Lagonda Global Holdings (AML) 150.30p -1.38%
Primary Health Properties (PHP) 93.60p -1.16%
Man Group (EMG) 254.00p -1.09%
Blackrock Throgmorton Trust (THRG) 647.00p -1.07%
Johnson Matthey (JMAT) 1,686.00p -1.06%
Bankers Inv Trust (BNKR) 114.60p -1.04%
TI Fluid Systems (TIFS) 135.80p -1.02%