(Reuters) -British equities fell on Tuesday, as global markets went into a risk-off mode after U.S. President Donald Trump said he was firing Federal Reserve Governor Lisa Cook.
The blue-chip FTSE 100 was down 0.6% by 0940 GMT, coming off its all-time highs and on track to snap a five-day winning streak.
Risk assets around the world fell after Trump said he was firing Cook over alleged improprieties in obtaining mortgage loans. Cook said in a statement that the President has no authority to remove her, but Trump’s statement brought back concerns about the Fed’s independence.
The pan-European STOXX 600 was last down 0.7% and U.S. stock index futures also indicated a weak open on Wall Street.
In the UK, heavyweight banks weighed the most on the FTSE 100, down 1.7%. Top lenders HSBC and Standard Chartered slipped 1.8% and 3.1%, respectively.
British 30-year government bond yields surged to their highest level since April 9, tracking a rise in U.S. Treasuries.
UK’s domestically focussed FTSE 250 midcap index dropped 1.1%. Home improvement retailer Wickes languished at the bottom of the index with a 9.3% fall after Deutsche Bank downgraded its rating to “sell” from “hold”.
Rival Kingfisher also lost 4.7% after Deutsche Bank cut its rating to “hold” from “buy”. Primark owner AB Foods dipped 4.6% after Deutsche Bank cut its rating on the stock to “sell”.
On the flipside, business supplies distributor Bunzl jumped almost 4% after the company maintained its annual guidance and resumed a share buyback programme.
A basket of precious metal miners gained 1.4% as gold prices climbed to a more than two-week high.
Last week, the FTSE 100 briefly hit an all-time high after Fed Chair Jerome Powell signalled a possible interest rate cut at the Fed’s September meeting, pushing risk assets higher.
Trading resumed on Tuesday after a UK bank holiday on Monday.
(Reporting by Shashwat Chauhan in Bengaluru; Editing by Leroy Leo)
