Market Turmoil Following Record Peaks and Political Upheaval
The FTSE 100 dipped after last week's record highs due to investor caution, while Mondi shares fell 16% on disappointing results. The market was further unsettled by the resignation of France's new prime minister, affecting European confidence. UK equities faced a double downgrade and saw varying sector performance.
The London FTSE 100 index, after celebrating record-breaking highs, faced a downturn on Monday as investors sold off amid disappointing corporate earnings, particularly impacting packaging giant Mondi. The FTSE 100 briefly surpassed the 9,500 mark, a milestone achievement, before closing down by 0.13% at 9,479.14 points.
Concerns extended beyond corporate performance, with the unexpected resignation of France's newly-appointed Prime Minister Sebastian Lecornu adding to European market instability. His departure within hours of forming a new government marked an unprecedented political event, rattling investor confidence across the UK and EU. British banks reflected the fiscal uncertainty, retreating by 0.5%.
In industry movements, UK equities were downgraded by Citigroup to 'underweight,' attributing the shift to the market's defensive posture. Meanwhile, sectors like mining and energy experienced moderate gains, benefiting from rising gold and crude prices, respectively. In contrast, luxury automaker Aston Martin saw significant declines amid regional demand slumps and emerging tariff impacts.
(With inputs from agencies.)
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