U.K. stocks pulled back Wednesday, giving back the prior day’s gain as investors took a cautious stance before a key trade-related meeting between U.S. President Donald Trump and European Union President Jean-Claude Juncker.
How markets are movingThe FTSE 100 UKX, -0.60% retreated by 0.8% to 7,648.72, erasing Tuesday’s 0.7% rise, which came as a promise of new stimulus by China spurred gains for mining stocks. The British blue-chip gauge is up 0.2% in July, but down 0.5% for the year.
The pound GBPUSD, +0.0989% traded at $1.3158, up slightly from $1.3144 late Tuesday in New York.
What’s driving the marketInvestors in the U.K. and worldwide have worried about a potential global trade war, but those concerns have been offset by some encouraging earnings reports. A softening pound also has been boosting the FTSE 100, as the index’s multinational companies generate most of their sales in other currencies.
Investors are watching for more developments on the trade-tensions front on Wednesday, as Juncker, the European Union’s top official, meets Trump at the White House to try to de-escalate Trump’s trade dispute with the EU.
Read: Europe counting on EU’s Juncker to try to calm trade fight with Trump
And see: Tariffs are ‘the greatest,’ Trump says ahead of EU chief’s visit
What analysts are saying“Stock traders are taking a cautious approach ahead of the Trump-Juncker meeting, as the stakes are high,” said Konstantinos Anthis, head of research at ADS Securities, in a note.
“A positive meeting with promises about removing trade levies will help stocks continue higher, while a disagreement and an exchange of threats will dampen sentiment and equities will shed their recent gains,” Anthis added.
Opinion: How the Trump-Juncker meeting could lead to a trade-war truce
Stocks in focusShares in Vodafone Group PLC VOD, -0.99% fell 0.8% after the wireless carrier said first-quarter revenue declined due to currency headwinds and the adoption of new accounting standards. The company also backed its full-year guidance.
Shares in ITV PLC ITV, +0.97% tacked on 0.4% after the broadcaster reported a rise in first-half pretax profit, while also unveiling plans to boost investment to become a more integrated producer-broadcaster.
