(Reuters) -London stocks dipped on Tuesday despite a sharp drop in the pound following finance minister Rachel Reeves’ comments, as equities around the world tumbled in a broader risk-off move.
The blue-chip FTSE 100 dipped 0.7% by 1120 GMT, on track for its biggest one-day drop in over two weeks, if losses hold. The midcap index also slid 0.5%.
Industrial metal miners bore the brunt of the selling pressure, down 2.3%, as a stronger dollar sent copper prices tumbling more than 2%.
Heavyweight banks lost 1.2%, with HSBC, Standard Chartered and Barclays all down more than 1% each.
The sentiment was grim all across Europe, with bourses in Germany, France and Italy down with the pan-continental STOXX 600 hitting its lowest since mid-October.
U.S. stock index futures were also down more than 1% each.
Meanwhile, the pound and UK government bond yields dipped after Rachel Reeves warned of “hard choices” in an unusual speech for a finance minister to make just three weeks before delivering her second annual budget.
“Her speech was as much about managing expectations as setting direction,” said Nigel Green, CEO of deVere Group in a note.
Looking ahead, the Bank of England is expected to pause its rate-cutting cycle on Thursday, though recent softer inflation and wage data could strengthen the case for a cut.
Among individual stocks, Diversified Energy jumped 9.6% after the oil and gas company hiked its annual profit forecast.
Energy giant BP reported a smaller than expected fall in third-quarter underlying profit. Its shares, however, were last down 0.5% after rising about 1% earlier in the day.
Associated British Foods fell 2.6% after the company said it could separate its Primark fashion shops from its food businesses and reported a 13% drop in full-year profit.
(Reporting by Shashwat Chauhan and Utkarsh Tushar Hathi in Bengaluru; Editing by Shailesh Kuber)
