BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - U.K. stocks fell on Tuesday after the United States slapped sanctions on Tehran and the Iranian government said the measures spell the 'permanent closure' for diplomacy between the two nations.
Ongoing uncertainty around U.S.-China trade talks also weighed on markets as hopes waned for progress in talks at the G20 summit.
The benchmark FTSE 100 was down 12 points or 0.16 percent at 7,406 after closing up 0.1 percent on Monday.
The dollar briefly scaled a one-month high on dollar weakness ahead of the Fed Chair Powell's speech.
Closer home, the favorite to replace British Prime Minister Theresa May, Boris Johnson, said he was seriously prepared to take the country out of the European Union in October with or without agreeing a deal with the bloc.
Trade uncertainty weighed on the banking sector, with Asia-focused HSBC Holdings and Llyods Bank declining around half a percent each.
Tesco fell 2.3 percent and Morrison lost 2.4 percent after the latest grocery market share figures, published by Kantar, showed grocers enjoyed only modest growth of 1.4 percent year-on-year during the quarter to June 16.
Carpetright, Britain's biggest floor coverings retailer, jumped more than 9 percent as it returned to sales growth in its new financial year.
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