FTSE 100 Dips Amid Weaker Retail Sales – India Stock Markets Suffer, Wiping Out Gains

London's stock market face a gloomy start on Tuesday morning, as the FTSE 100 index trades down 0.68% through the early hours, threatening to dip below 8200. The wider FTSE 250 has fared worse so far, decreasing by 0.95%. This downturn is mainly attributed to underwhelming retail sales that failed to meet industry expectations for May.

According to recent data, total UK retail sales in May saw a slight year-on-year increase of 0.7%. However, this modest growth was highly selective, with food sales enjoying a 3.6% uptick whereas non-food sectors witnessed a significant slump, registering a 2.4% drop. This disparity underscores the challenges facing the British retail landscape, particularly in the non-food sectors.

In political developments that could impact the business environment, the Conservative party has revealed their proposal for introducing new yearly limits on both work and family visas. This announcement comes in reaction to the Labour party's pledge to curtail the volume of migrants entering the UK, marking a significant stance in the ongoing discussion regarding immigration policy.

Global markets showed a varied response, with Asia’s major indices displaying diverse trends on Tuesday. Japan's Nikkei 225 went down by 0.22%, while both China’s SSE Composite and Hong Kong's Hang Seng index edged higher, up by 0.41% and 0.22%, respectively. The FTSE Bursa Malaysia KLCI (KLSE) ended the day up 1.17% whilst notable news in India stock markets as a result of Modhi's narrower lead.

The key Indian indexes the Nifty 50 trade down 6.46% on the day, as the SENSEX retreated 6.28%. This is one of the worst days for Indian markets in recent times, and plunges the SENSEX into negative territory on the year, down 0.84% 2024 to date. The Nifty 50 manages to remain above water on 2024, but with gains largely erased, 0.09% in the green.

On the commodities front, the influential OPEC+ group decided to extend production cuts until the end of 2025 in an effort to maintain buoyant oil prices. Subsequently, Brent crude was trading at $77.39 a barrel early in London on Tuesday.

The London stock market's early losses reflect caution among investors influenced by a combination of local and global factors. The lackluster growth in retail sales, evolving immigration policies, and individual stock performances all play a role in shaping market sentiment. The wider global picture is showing some of the local nuances, and show the volatility that can surround fundamental events.