The FTSE 100 was on the back foot on Monday as investors erred on the side of caution ahead of a busy week for geopolitics and US monetary policy.
London’s leading index was down just 10 points at the time of writing, reflecting mild profit-taking as opposed to outright risk aversion.
After Trump’s meeting with Putin yielded nothing more than a photo op and footage of US stealth bombers flying over Putin’s head, attention has shifted to Trump’s meeting with the Ukrainian leader and European partners this evening.
Again, this isn’t expected to produce any meaningful market-moving news, but the unpredictability of Donald Trump is reason enough to be cautious.
Perhaps the foremost factor pulling the FTSE 100 into minor negative territory on Monday is the upcoming Jackson Hole Symposium and potential for Jerome Powell to be slightly more hawkish in his interest rates commentary than the market would like.
“Investors are…waiting for the upcoming Jackson Hole central banker meeting, for clues about the direction of interest rates in the United States, with expectations that recent data will pave the way for more cuts,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“Despite the fierce criticism he’s had to shoulder from President Trump, Fed chair Jerome Powell is not expected to set a firm path for rate reductions.”
Cyclical sectors fell on Monday, with miners and financials leading the way lower.
Centrica was the FTSE 100’s top faller as traders sold the stock after it failed to breach technical resistance at the 170p mark for the fourth time since the beginning of June.
Defence shares, Babcock and BAE Systems, were among the top risers on hopes of reiterated commitment to boosting defence spending by European countries.
Babcock was the top riser with a gain of 4% after equity analysts at RBC gave the stock a 1,200p price target.