London Markets Falter Amid Global Cyber Outage and Falling Retail Sales

London stocks ended the week lower due to a global cyber outage on Friday, as investors assessed a decline in domestic retail sales for June. The commodity-linked stocks also fell, tracking declines in copper, gold, and other metals prices.

The blue-chip FTSE 100 index dropped by 0.6%, while the mid-cap FTSE 250 decreased by 0.8%. This decline ended a streak of two consecutive weeks of gains for both indexes in London.

LSEG Group, which operates the London Stock Exchange, reported that its Workspace news and data platform, regulatory news service, and currency spot and forward prices were affected by a “third-party global technical issue.”

However, by midday in London, most of these issues had been resolved. Securities trading on the London Stock Exchange was not impacted.

Sector-Specific Performance

Mining stocks significantly dragged down the blue-chip index as prices for both precious and base metals declined due to weaker demand from China and expectations of a U.S. interest rate cut in September. Precious metal miners fell by 0.8%, with Fresnillo dropping 1.4% in line with a decrease in spot gold prices.

Industrial metal miners saw a 1.7% decline as copper prices reached a three-month low in the absence of Chinese stimulus measures.Aerospace and defense stocks were the only sector to see gains, rising 0.7% amidst the broader market decline.
This increase followed a meeting between senior executives from British defense firms, including BAE and Babcock, and Ukrainian President Volodymyr Zelenskiy to discuss enhancing military support for Ukraine in its conflict with Russia.

Investors’ Reactions to Retail Sales Data

Investors closely examined domestic retail sales data, which revealed a larger-than-expected 1.2% drop in June, following slower wage growth and inflation at the Bank of England’s 2% target.

The disappointing retail data increased the likelihood of an August interest rate cut, with bets rising to 43%, up from roughly 39% on Thursday. Personal goods and retail stocks fell by 5.3% and 0.3% respectively.

Looking ahead, attention will shift to corporate earnings in the United States and the UK, with a particular focus on U.S. inflation numbers ahead of the Federal Reserve’s next monetary policy meeting. Shares of non-life insurer Beazley Plc fell 3.3%, which RBC analysts attributed to concerns over losses from a Microsoft cloud outage.

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