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(Sharecast News) - London stocks ended lower on Wednesday, with the top-flight index snapping a 16-day winning streak as investor caution ahead of the US Federal Reserve's policy decision weighed on sentiment.
The FTSE 100 index fell 0.44% to 8,559.33 points, while the FTSE 250 edged down 0.08% to 20,337.00 points.
In currency markets, sterling was last down 0.26% on the dollar to trade at $1.3334, as it dipped 0.03% against the euro, changing hands at €1.1756.
"Markets are anxious to hear Powell's views on the economy this evening, and whether the Fed chairman will give any indications that he might cut rates in June, joining other central banks," said IG chief market analyst Chris Beauchamp.
"China's overnight stimulus moves are likely the kind of thing the president and global investors would like to see from the Fed, but caution will stay Powell's hand for the time being."
Beauchamp noted that geopolitical concerns had abated "to an extent" in oil, which had rallied on fears that India and Pakistan would escalate to a full-blown conflict.
"At present it appears confined to retaliatory strikes, doing damage and inflicting casualties but stopping short of anything more.
"US-Iran talks have been quiet too, easing fears of a widening conflict in the Middle East."
UK, eurozone construction sectors under pressure
In economic news, the UK construction sector remained under pressure in April, according to data published earlier, though the pace of decline moderated slightly.
The S&P Global UK construction purchasing managers' index (PMI) edged up to 46.6 from 46.4 in March, defying forecasts for a sharper drop to 45.7.
While the reading remained below the 50.0 threshold that signals contraction, it marked the slowest decline in output in three months, supported by a smaller fall in residential building activity.
The sector continued to suffer from weak demand, however, with firms reporting delayed project decisions, shrinking order books, and further job losses.
Civil engineering was the weakest segment, with a PMI of 43.1, while commercial activity also contracted at its fastest pace since May 2020.
"UK construction companies have endured a bumpy ride since the start of the year, as domestic economic headwinds and hesitancy among clients led to a lack of new work to replace completed contracts," said Tim Moore, economics director at S&P Global Market Intelligence.
However, looking forward, Moore said there had been a slight improvement in business activity expectations for the year ahead, with respondents citing a potential turnaround in the residential sector.
On the continent, eurozone construction activity also contracted in April but showed tentative signs of stabilisation.
The HCOB eurozone construction PMI rose to 46.0 from 44.8 in March, signalling the softest decline since early 2023.
New orders fell at their slowest rate in three years, and Germany saw a notable rebound, with its PMI climbing to 45.1, a 26-month high.
France and Italy posted mixed results, with France slipping slightly to 43.6 and Italy dipping to a still-expansionary 50.1.
Despite easing declines across housing, commercial, and civil engineering, sentiment remained subdued, with firms citing elevated cost pressures, which rose to a 15-month high.
Normal Liebke, economist at Hamburg Commercial Bank, acknowledged that the construction sector "improved slightly" in April.
"HCOB Economics expects further interest rate cuts by the European Central Bank in the coming months, which would benefit the construction industry," he said.
"The outlook remains bleak; orders are falling rapidly and are well below the historical average.
"Business expectations have declined further, with no signs of improvement in the near future, particularly given the increased geopolitical uncertainties."
Separately, eurozone retail sales fell unexpectedly in March, breaking a four-month run of steady or rising volumes.
Data from Eurostat showed a 0.1% month-on-month decline, missing forecasts for flat growth.
Sales of both food and non-food products slipped 0.1%, while fuel sales rose 0.4%.
Among member states, Malta and Belgium posted the strongest monthly increases, while Slovenia and Estonia recorded the steepest falls.
Annual growth in retail sales slowed to 1.5%, the weakest since July last year, down from 1.9% in February.
Pharma giants in the red on FDA appointment, Victrex jumps
On London's equity markets, pharmaceutical majors GSK and AstraZeneca fell sharply, down 5% and 2.07% respectively, after the US Food and Drug Administration appointed Vinay Prasad - a known vaccine sceptic - to a key regulatory role.
Prasad, who had criticised the agency's leadership and Covid-19 policies, would oversee biologic drugs including vaccines, raising concerns over longer approval timelines for future products.
Telecoms were also under pressure - Vodafone slipped 0.47% after announcing that chief financial officer Luke Mucic would depart by early 2026 to join Vonovia.
Sector peer BT Group declined 1.74%.
Defence firm BAE Systems dropped 2.18%, despite reaffirming its full-year outlook and highlighting strong demand and order visibility in its first-quarter update.
Trainline was among the session's steepest decliners, falling 4.93% after warning that ticket sales growth would slow this year due to economic uncertainty and the expansion of London's contactless travel network.
On the upside, Victrex jumped 6.73% after the polymer specialist said its offshore energy-focused 'Magma' project had advanced, with Petrobras awarding a key contract to TechnipFMC to signal progress toward potential multi-year revenues.
Spirent Communications rose 0.65%, recovering from earlier losses after issuing an in-line first-quarter trading update.
Entain added 0.12% as it extended its recent rally, fuelled by the confirmation of Stella David as chief executive officer and last week's strong quarterly results.
Marks & Spencer also edged up 0.14% in a modest rebound from recent losses linked to operational disruption caused by a cyberattack.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 8,559.33 -0.44%
FTSE 250 (MCX) 20,337.00 -0.08%
techMARK (TASX) 4,600.05 -1.54%
FTSE 100 - Risers
Entain (ENT) 703.80p 2.33%
JD Sports Fashion (JD.) 82.96p 2.22%
InterContinental Hotels Group (IHG) 8,608.00p 2.11%
Glencore (GLEN) 252.00p 1.72%
Prudential (PRU) 828.60p 1.67%
Smurfit Westrock (DI) (SWR) 3,001.00p 1.63%
Admiral Group (ADM) 3,382.00p 1.62%
Rio Tinto (RIO) 4,539.50p 1.36%
M&G (MNG) 214.50p 1.13%
Imperial Brands (IMB) 3,155.00p 1.09%
FTSE 100 - Fallers
GSK (GSK) 1,379.00p -4.90%
Rentokil Initial (RTO) 349.70p -3.26%
Associated British Foods (ABF) 1,971.50p -2.40%
BAE Systems (BA.) 1,729.00p -2.34%
CRH (CDI) (CRH) 6,956.00p -2.28%
SEGRO (SGRO) 672.80p -2.27%
Rolls-Royce Holdings (RR.) 766.00p -1.95%
3i Group (III) 4,215.00p -1.93%
Vodafone Group (VOD) 71.58p -1.92%
AstraZeneca (AZN) 10,504.00p -1.83%
FTSE 250 - Risers
Victrex plc (VCT) 902.00p 6.73%
Wetherspoon (J.D.) (JDW) 730.00p 6.10%
WH Smith (SMWH) 944.50p 3.94%
Bloomsbury Publishing (BMY) 621.00p 3.16%
Telecom Plus (TEP) 1,980.00p 3.02%
Mitchells & Butlers (MAB) 265.00p 2.91%
Crest Nicholson Holdings (CRST) 193.90p 2.76%
TP Icap Group (TCAP) 266.50p 2.30%
Pennon Group (PNN) 518.50p 2.27%
Kier Group (KIE) 155.80p 2.23%
FTSE 250 - Fallers
Oxford Nanopore Technologies (ONT) 119.40p -5.39%
Auction Technology Group (ATG) 579.00p -5.08%
Ferrexpo (FXPO) 61.50p -4.95%
Trainline (TRN) 268.80p -4.00%
Genus (GNS) 2,010.00p -3.59%
IP Group (IPO) 42.80p -3.28%
Domino's Pizza Group (DOM) 260.00p -3.12%
Vistry Group (VTY) 623.20p -3.02%
Indivior (INDV) 847.00p -2.92%
Marshalls (MSLH) 283.00p -2.59%
