The FTSE 100 closed lower on Tuesday as investors remained cautious ahead of economic data that could influence expectations for US and UK interest rates. Losses from Burberry also weighed on the market.
The blue-chip FTSE 100 declined by 0.4% to 8,247.79 points.
The top performer was insurer Admiral, which rose 2.3%, followed by easyJet, which increased by 1.9%. The biggest decline was seen in Burberry, down 4.5%, with ConvaTech, a medical products company, falling 4.1%.
In contrast, the mid-cap FTSE 250 dropped by 1%. The leading gainer was cruise operator Carnival, up 9.4%, followed by Sdcl Energy Efficiency Income Trust, which climbed 5.9%. The largest decline was recorded by Ocado, down 7%, and heat treatment services company Bodycote, which fell 5.6%.
This week, the UK gross domestic product (GDP) data is expected, which could potentially bolster Bank of England (BoE) policymakers’ confidence in an interest rate cut in August.
The UK parliamentary elections on July 4 are contributing to the overall caution, with investors anticipating that the BoE will refrain from releasing minutes of its meeting ahead of the polls.
Melrose shares dropped after Airbus, a major client, issued a profit warning, citing a shortage of plane parts, which is expected to reduce deliveries.
Dan Coatsworth, investment analyst at AJ Bell, commented:
“It is tempting to think that life will be simpler if your biggest rival is in disarray, and Boeing’s woes could be a potential advantage for Airbus. However, the European firm is facing its own challenges, impacting its supply chain.”
Shares in engineering companies Melrose, Rolls-Royce, and Bodycote fell, along with those of European manufacturers MTU Aero Engines and Safran, as Airbus hit a seven-month low.
