The FTSE 100 closed down 9.00 points, or 0.1%, at 10,428.85 on Tuesday, as weakness in mining stocks and disappointing UK economic data dampened sentiment. The FTSE 250 ended 270.54 points lower, down 1.2%, at 22,926.47, while the AIM All-Share fell 11.68 points, or 1.5%, to 782.59.
UK Services Sector Contracts
Figures from S&P Global showed the flash UK composite output index fell to 49.4 in June from 49.7 in May, missing the consensus forecast of 50.6. A reading below 50 indicates contraction. The downturn was driven by the services sector, where the business activity index dropped to 48.7 from 49.3, its lowest in 41 months and below the 50.0 consensus.
Analysts at RBC Capital Markets noted a sharp deterioration in new orders and a further decline in employment intentions within the services survey. However, they suggested that much of the data was collected before the US-Iran deal, pointing to a potential improvement in the final survey result.
The pound traded at $1.3198 on Tuesday afternoon, down from $1.3254 on Monday. Against the euro, sterling firmed to €1.1595 from €1.1587.
US Tech Weakness Spreads
In New York, the Dow Jones Industrial Average fell 0.2%, the S&P 500 dropped 1.4%, and the Nasdaq Composite slid 2.0%, extending Monday's declines. A 16% plunge in Elon Musk's SpaceX rattled investor confidence, though the stock rebounded 3.1% on Tuesday.
Stephen Innes at SPI Asset Management said the market's concern is no longer just AI demand, but whether the investment cycle is outrunning the economics needed to justify it. Micron Technology fell 11%, Advanced Micro Devices dropped 5.9%, and Nvidia declined 3.8%.
David Morrison at Trade Nation commented: "Time will tell if this is just another 'buy the dip' opportunity, or a harbinger of worse things to come."
The tech weakness spread to Asia, with Japan's Nikkei falling 3.6%. SoftBank dropped 10%, and Tokyo Electron dipped 6.2%. In South Korea, SK Hynix and Samsung both fell 12% and 12% respectively. In London, Scottish Mortgage Investment Trust and Polar Capital Technology Trust each fell 3.3%.
European Markets and Data
In Europe, the Cac 40 in Paris ended down 0.7%, and the Dax 40 in Frankfurt fell 1.0%. The eurozone composite PMI rose to 49.5 in June from 48.5 in May, above the consensus of 49.1, driven by the services sector. The manufacturing PMI edged down to 51.3 from 51.6, still above the 51.2 consensus.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said: "The eurozone economy is showing enough resilience to just about stay out of recession."
The US 10-year Treasury yield traded at 4.49%, down from 4.51% on Monday, while the 30-year yield fell to 4.93% from 4.95%.
Commodities and Miners Weigh
Oil prices edged lower, with Brent crude for August delivery at $77.10 a barrel, down from $77.38, as tankers return to the Strait of Hormuz following the US-Iran deal. Gold fell to $4,134.67 an ounce from $4,184.04.
Weak metals prices hit miners: Antofagasta fell 5.5%, Anglo American dropped 5.0%, and Glencore declined 4.2%. Gold miners Fresnillo and Endeavour Mining were down 5.2% and 3.2% respectively.
Bunzl Leads Risers
Bunzl rose 5.6% after raising its 2026 revenue guidance, citing inflation-linked pricing, improving volumes in North America, and acquisitions. The company now expects "modest underlying growth" in full-year revenue, up from "some underlying revenue growth" previously.
Analysts at Stifel called the update "encouraging" after a period of subdued demand, adding: "The upgrade to expectations is further evidence Bunzl is returning to its resilient, consistent compounder story."
Ramsdens surged 31% after accepting a £206 million bid from FirstCash Holdings, a US pawnbroking operator with over 3,300 locations. Ramsdens said the offer provides a "clear and certain route to monetisation at an attractive valuation."
The biggest FTSE 100 risers were Bunzl, British American Tobacco, Diageo, AstraZeneca, and BT Group. The biggest fallers were Antofagasta, Fresnillo, Anglo American, Glencore, and Rio Tinto.
Wednesday's calendar includes Germany's Ifo business climate report, US new homes sales, and full-year results from Berkeley Group.
