(Reuters) -British equities fell on Tuesday, as global markets went into a risk-off mode after U.S. President Donald Trump said he was firing Federal Reserve Governor Lisa Cook. The blue-chip FTSE 100
London Stocks Decline as Global Markets React to Trump's Fed Comments
(Reuters) -Britain's FTSE 100 closed lower on Tuesday, snapping a five-day winning streak as global markets went into a risk-off mode after U.S. President Donald Trump said he was firing Federal Reserve Governor Lisa Cook.
The blue-chip FTSE 100 closed 0.6% lower, coming off its record highs hit last week when markets got a lift after Fed Chair Jerome Powell signalled a possible interest rate cut at the Fed's September meeting.
Risk assets around the world fell after Trump said he was firing Cook over alleged improprieties in obtaining mortgage loans. Cook said in a statement that the president has no authority to remove her, but Trump's statement brought back concerns about the Fed's independence.
The pan-European STOXX 600 closed 0.8% lower, while the U.S. S&P 500 was flat after opening slightly lower.
In the UK, heavyweight banks and healthcare lost 0.9% each, among the biggest weights on the blue-chip index.
British 30-year government bond yields briefly surged to their highest level since April 9, tracking a rise in U.S. Treasuries.
UK's domestically focussed FTSE 250 midcap index dropped 1%. Home improvement retailer Wickes languished at the bottom of the index with a 8.6% fall after Deutsche Bank downgraded its rating to "sell" from "hold".
Rival Kingfisher also lost 4.4% after Deutsche Bank cut its rating to "hold", while Primark owner AB Foods dipped 4% after the brokerage downgraded the stock to "sell".
British American Tobacco shed 1.9% after the company said its finance chief Soraya Benchikh is stepping down with immediate effect.
On the flipside, business supplies distributor Bunzl jumped 5.1% after the company maintained its annual guidance and resumed a share buyback programme.
A basket of precious metal miners gained 1.9%, tracking a rise in gold prices.
Trading resumed on Tuesday after a UK bank holiday on Monday.
(Reporting by Shashwat Chauhan in Bengaluru; Editing by Leroy Leo and Richard Chang)
