Markets slide as US cancels key summit

Market report Emma Newlands

Markets were knocked as traders were caught off-guard by the US decision to cancel its summit with North Korea.

Donald Trump has said he will not meet North Korean leader Kim Jong Un, saying rising tensions had ruined “a great opportunity for lasting peace”.

The geopolitical upheaval sent US and European stocks downwards, with the FTSE 100 closing the day 71.7 points lower at 7,716.74. The Dow Jones Industrial Average meanwhile dropped 0.3 per cent.

Ken Odeluga, market analyst at City Index, forecast the market showing a “less sanguine attitude to wider geopolitical currents”, adding: “US shares will be the most obvious conduit for weakening sentiment, though in the short term, it is also likely to be reflected via the dollar.”

In currency markets, sterling was supported by solid UK retail sales. The pound was up 0.22 per cent against the dollar at $1.338. Against the euro, the pound was flat at €1.141 towards the end of the session.

In UK stocks, Lloyds Banking Group suffered double humiliation after more than a fifth of investors voted against pay for top bosses, while TV star Noel Edmonds publicly berated the board. Shares closed 0.63p lower at 66p.

BT’S shares took a hit after it emerged boss Gavin Patterson is celebrating a £1 million hike in annual pay, weeks after cutting 13,000 jobs. Shares fell 3.15p during trading to 203.15p. The biggest risers on the FTSE 100 included Intertek Group up 176p to 5,350p and Paddy Power Betfair up 225p to 8,855p. The biggest fallers included Morrisons down 9.2p to 245.2p. The new boss has outlined plans for $100 million (£75m) of savings and to boost profits as part of an overhaul after taking up the reins last month. Shares in Petra Diamonds tumbled after it made a $178 million (£133m) cash-call to investors to boost its balance sheet and reduce debt.