London open: Stocks fall after Trump's Fed intervention; Bunzl a bright spot

(Sharecast News) - London stocks fell in early trade on Tuesday after the long weekend, with investors rattled after US President Donald Trump moved to oust Federal Reserve governor Lisa Cook.

At 0825 BST, the FTSE 100 was down 0.5% at 9,260.77.

Trump said on his social media platform Truth Social on Monday that he had "sufficient" reason to fire Cook based on allegations that she made false statements on mortgage agreements.

Nigel Green, chief executive of global financial advisory giant deVere Group, said the combination of Trump's intervention and Fed Chair Jerome Powell's cautious approach at Jackson Hole was unnerving markets.

"Trump's decision to remove a sitting Fed governor has shaken confidence in the institution that underpins the world's financial system," he said. "Investors are reacting because the independence of the central bank is critical to market stability, and any sign of political capture raises alarm bells everywhere.

"Powell had the chance last week at Jackson Hole to directly address these institutional concerns. He did not.

"Instead, he chose to focus narrowly on the near-term policy path.

"The silence on independence has left markets exposed, and investors are filling the vacuum with speculation. This speculation is highly damaging."

On home shores, the latest shop price index from the British Retail Consortium and NIQ showed that food inflation hit its highest level in 18 months in August.

Shop price inflation rose 0.9% year-on year from 0.7% in July, while food inflation increased to 4.2% in August, from 4.0% the month before.

BRC chief executive Helen Dickinson said: "Shop price inflation hit its highest rate since March last year, fuelled by food price rises. This adds pressure to families already grappling with the cost of living. Staples such as butter and eggs saw significant increases due to high demand, tightening supply, and increased labour costs. Chocolate also got more expensive as global prices of cocoa remain high owing to poor harvests. There was some respite for parents ahead of the new academic year, with lower prices for clothing, books, stationery, and computing.

"Retailers continue doing everything they can to limit price rises for households, but as the Bank of England acknowledged, the �7bn in new costs flowing through from last year's Budget has created an uphill battle for retailers. That is why over 60 retail CEOs recently wrote to the Chancellor with a call to ensure there are no further taxes rises on retail this Autumn. The planned business rates reforms present an opportunity to deliver a meaningful reduction in retail, hospitality and leisure bills, ensure no shop pays more as a result and help retailers keep prices low for customers."

In equity markets, British American Tobacco lost ground as it announced that chief financial officer Soraya Benchikh was stepping with immediate effect.

B&Q and Castorama owner Kingfisher slid after a downgrade to 'hold' at Deutsche Bank, while Primark owner AB Foods and Wickes also fell after downgrades to 'sell' by the same outfit.

On the upside, Bunzl jumped to the top of the FTSE 100 even as it reported a drop in first-half profit.

Richard Hunter, head of markets at Interactive Investor, said "bargain hunters sought the stock despite lower half year profit".

Market Movers

FTSE 100 (UKX) 9,260.77 -0.52%

FTSE 250 (MCX) 21,964.94 0.67%

techMARK (TASX) 5,408.83 -0.21%

FTSE 100 - Risers

Bunzl (BNZL) 2,508.00p 5.20%

BP (BP.) 427.15p 0.87%

Antofagasta (ANTO) 2,184.00p 0.78%

Fresnillo (FRES) 1,698.00p 0.53%

Halma (HLMA) 3,276.00p 0.49%

Rio Tinto (RIO) 4,620.00p 0.41%

Shell (SHEL) 2,702.00p 0.37%

Anglo American (AAL) 2,209.00p 0.36%

Smurfit Westrock (DI) (SWR) 3,355.00p 0.30%

Rolls-Royce Holdings (RR.) 1,046.00p 0.29%

FTSE 100 - Fallers

Kingfisher (KGF) 270.50p -3.81%

Associated British Foods (ABF) 2,231.00p -3.59%

British American Tobacco (BATS) 4,194.00p -2.80%

Coca-Cola HBC AG (CDI) (CCH) 3,822.00p -1.80%

Schroders (SDR) 389.80p -1.71%

Barclays (BARC) 370.15p -1.67%

NATWEST GROUP (NWG) 553.40p -1.60%

Prudential (PRU) 983.60p -1.52%

Rentokil Initial (RTO) 357.10p -1.52%

InterContinental Hotels Group (IHG) 8,816.00p -1.39%

FTSE 250 - Risers

Rathbones Group (RAT) 1,960.00p 1.77%

Me Group International (MEGP) 208.00p 1.46%

Hochschild Mining (HOC) 304.40p 1.26%

Man Group (EMG) 167.80p 1.21%

Burberry Group (BRBY) 1,237.50p 1.19%

Harbour Energy (HBR) 232.40p 0.96%

GCP Infrastructure Investments Ltd (GCP) 74.80p 0.94%

Baillie Gifford US Growth Trust (USA) 266.00p 0.76%

Endeavour Mining (EDV) 2,566.00p 0.55%

Templeton Emerging Markets Inv Trust (TEM) 202.00p 0.50%

FTSE 250 - Fallers

Wickes Group (WIX) 209.00p -5.22%

AO World (AO.) 88.00p -2.65%

Ocado Group (OCDO) 351.00p -2.15%

Vistry Group (VTY) 632.60p -2.13%

Jpmorgan European Growth & Income (JEGI) 126.00p -1.95%

Volution Group (FAN) 641.00p -1.84%

WH Smith (SMWH) 698.00p -1.83%

Worldwide Healthcare Trust (WWH) 327.50p -1.80%

Kier Group (KIE) 198.40p -1.78%

Ninety One (N91) 190.20p -1.71%