Key points:

  • London markets fell for the third day in a row, following a pan-European trend.
  • The FTSE 100 and FTSE 250 were down 0.3%.
  • The pound sterling fell by 0.5% against the US dollar.

London markets ended lower for the third session in a row, following the pan-European trend. Energy and pharmaceutical stocks were the biggest decliners, with investors remaining cautious ahead of the Federal Reserve’s release of a key U.S. inflation gauge scheduled for Friday.

The FTSE 100 index, which covers the largest companies, lost 0.3%, while the FTSE 250 index, which focuses on mid-cap companies, also fell 0.3%.

Traders are waiting for GDP data for the first quarter

Sterling fell 0.5% against the US dollar, reflecting a broader trend of dollar strength amid growing investor caution.

The publication of the US Personal Consumption Expenditures (PCE) price index on Friday is expected to influence the Fed’s future monetary policy.

In the UK, investors are eagerly awaiting second-quarter GDP data, which could shed light on the prospects for future Bank of England interest rate decisions.

Uncertainty surrounding the upcoming UK parliamentary elections on July 4 is also adding to market caution. Investors fear that political instability could have a negative impact on the pound.

Thus, the decline of the pound against the US dollar is due to a combination of factors, including global inflation tensions, expectations regarding the monetary policy of central banks and political uncertainty in the UK.

It’s important to note that UK GDP data, due out on Friday, could be key to the future direction of the pound. If the data is stronger than expected, it could push the Bank of England to raise interest rates earlier than expected, which could push the pound higher.

FTSE 100 falls for third session in a row

London’s FTSE 100 index ended trading lower for the third day in a row, reaching 8179.68 points.

The market decline was largely driven by a 4.6% decline in shares of pharmaceutical giant GSK. The reason for GSK’s fall was the decision of the US Centers for Disease Control and Prevention (CDC) to narrow recommendations on the use of the company’s vaccine against respiratory syncytial virus (RSV). The CDC recommended that the vaccine be used only in older adults this year, holding off on its use in adults under 60.

The oil and gas sector also showed negative dynamics, losing 0.6% amid falling oil prices. At the same time, shares of companies mining precious metals and industrial metals were among the leaders of growth.

Investors are also cautiously awaiting the release of key economic data in the US and UK, which will further influence stock performance.