London’s stock market closed in negative territory on Friday as investors adopted a cautious stance ahead of high-stakes talks between U.S. President Donald Trump and Russian President Vladimir Putin in Alaska. The discussions aimed to broker a potential resolution to the ongoing war in Ukraine, with global markets closely monitoring the outcome.
Russ Mould, investment director at AJ Bell, remarked, “Alaska rarely takes center stage in financial markets, but today’s summit between Trump and Putin has captured global attention. While any concrete agreements will emerge after UK markets close, traders are keenly watching for signals of a credible peace deal, which could shape market sentiment next week.”
The FTSE 100 declined by 0.42%, closing at 9,138.90, while the FTSE 250 dipped 0.2% to 21,758.24. Market participants remained wary, with oil prices fluctuating as traders assessed whether the talks might lead to a resumption of Russian energy exports to Western nations.
Currency and Bond Markets React
The British pound gained 0.18% against the U.S. dollar, reaching $1.3557, but slipped 0.28% versus the euro to €1.1584. Meanwhile, U.S. Treasury yields saw a modest rebound following earlier losses triggered by a stronger-than-expected inflation report, which tempered expectations of an imminent Federal Reserve rate cut.
Patrick Munnelly, market strategist at TickMill, noted, “Treasuries recovered slightly as traders adjusted their Fed rate cut bets. Oil prices held steady as the market braced for the Trump-Putin summit, which could influence global energy supply dynamics.”
Mixed Economic Signals: U.S. Retail Sales Rise, China Data Falls Short
In economic updates, U.S. retail sales met expectations in July, rising 0.5% after a 0.6% increase in June, according to the U.S. Census Bureau. Core sales (excluding autos) grew by 0.3%, indicating a slight cooling in discretionary spending. Year-over-year, sales climbed 5.9%, bolstered by back-to-school shopping and extended summer discounts.
However, economic concerns lingered as China’s latest industrial production and retail sales figures disappointed analysts, adding to global growth worries. For more insights on how geopolitical tensions impact financial markets, check out this analysis from Reuters.
