Turkey crisis weighs on UK stock market

The FTSE 100 spent another session in the red as jitters over Turkey’s financial crisis continued to dampen appetite for European stocks.

London’s blue chip index ended the day down 0.4% or 30.81 points at 7611.64.

The French CAC 40 was also in the red, down 0.16%, while the German DAX was flat.

Investors have been slow to re-embrace European stocks amid concerns of a contagion effect from Turkey’s currency crisis, triggered by worries over President Recep Tayyip Erdogan’s economic policies and a trade and diplomatic dispute with the United States.

The two countries are at loggerheads over Turkey’s detention of American evangelical pastor Andrew Brunson, with Donald Trump exacerbating the feud by doubling steel and aluminium tariffs on the country.

Mr Erdogan has responded by telling Turks to boycott US electronic goods.

Sterling was mixed, trading lower by around 0.3% against the US dollar at 1.272 but rising 0.2% versus the euro to trade at 1.121.

Investors were digesting UK data which showed unemployment reached a 40-year low.

The Office for National Statistics said unemployment fell by 65,000 in the latest quarter to 1.36 million, the lowest figure since 1976, while the jobless rate came in at 4%.

Brent crude prices were up 0.4% at $73.08 per barrel as markets reacted to reports that Saudi Arabia had cut its oil production.

It added to concerns about restricted supply, with US sanctions on Iran also threatening to hit crude exports.