LONDON MARKETS: FTSE 100 Wobbles Into The Close As Pound Rallies On Brexit Progress
2017年10月21日 - 1:26AM
Dow Jones News
By Carla Mozee and Sara Sjolin, MarketWatch
London benchmark falls for the week
U.K. stocks significantly trimmed their gains and closed only
marginally higher on Friday, weighed by a rise in the pound after a
more positive tone came out of the EU summit in Brussels, seen as
moving Brexit talks along.
What stocks are doing: The FTSE 100 index ended 0.19 point
higher at 7,523.23, finishing the week 0.2% lower and breaking a
four-week winning streak.
The London benchmark had opened in positive territory on Friday,
boosted by a slide in pound against the dollar after the U.S.
Senate narrowly approved a Republican budget resolution
(http://www.marketwatch.com/story/senate-republicans-approve-budget-proposal-clearing-path-to-tax-overhaul-2017-10-19).
The 51-49 vote paves the way for tax reforms that could lead to
$1.5 trillion in U.S. tax cuts and is seen as dollar positive,
analysts said.
Weakness in the pound can help pull up shares of multinational
companies. It can provide a currency-related boost to earnings,
once the companies translate their revenue into sterling.
Brexit talks: However, later in the day, sterling started to
move higher after progress was made in Brexit talks between the
U.K. and EU leaders.
Donald Tusk, president of the European Council, said European
Union leaders have given the go-ahead to start internal discussions
on the second phase of Brexit talks. However, that doesn't mean
those talks on trade are ready to start, observers said.
(https://twitter.com/eucopresident/status/921308246127857664)
Meanwhile, U.K. Prime Minister Theresa May said line-by-line
work will continue on reaching an amount for the U.K.'s exit bill
that the EU says it must pay. EU leaders were wrapping up their
summit in Brussels on Friday.
The pound traded at $1.3178 at the time of the European close,
up from $1.3159 late Thursday in New York.
What strategists are saying: "A surge throughout the day for the
pound has been prompted by a wave of signs that suggest a softening
of the EU's stance on trade talks. Crucially, it is the lady
herself, Angela Merkel, that has been keen to stress the progress
being made," said Chris Beauchamp, chief market analyst at IG, in a
note.
"This has been enough to tempt some sterling bulls out of their
hiding places, after a week in which U.K. data has taken the shine
off expectations for a BOE rate hike in November," he added.
Stock movers: InterContinental Hotels Group PLC (IHG) fell 0.9%
after a financial update. The operator of the Crown Plaza and
Holiday Inn chains said it is confident in its outlook for the rest
of 2017
(http://www.marketwatch.com/story/intercontinental-hotels-backs-view-as-sales-rise-2017-10-20),
as it reported an increase in room revenue.
Unilever PLC (ULVR.LN) (ULVR.LN) lost 3.2%, adding to a 5.5%
loss on Thursday when the consumer-products giant reported a
slowdown in revenue. For the week, Unilever shares dropped 7.6%,
logging their worst week since February 2009.
Bank of England watch:BOE's Deputy Gov, Jon Cunliffe
(https://www.bloomberg.com/news/articles/2017-10-19/boe-s-cunliffe-says-timing-of-rate-hike-is-an-open-question-j8yrzrb8)
struck a cautious tone about the potential for a U.K. interest-rate
hike next month in an interview with the BBC late Thursday. He said
it was an "open question" when to begin slow and gradual
increases.
Read:Brexit is far from the only worry for U.K. stocks
(http://www.marketwatch.com/story/brexit-is-far-from-the-only-worry-for-uk-stocks-2017-10-14)
The stream of economic data this week has been closely watched
for prompts for the BOE as it assess its next move on interest
rates. The bank's monetary policy makers are largely expected to
raise the benchmark rate from its record low of 0.25% at a meeting
in November.
Retail sales fell 0.8% in September
(http://www.marketwatch.com/story/uk-retail-sales-disappoint-with-drop-of-08-2017-10-19)
from the previous month, inflation-adjusted pay fell for the sixth
time in a row
(http://www.marketwatch.com/story/uk-real-wages-fall-for-6th-month-in-a-row-2017-10-18)
in August, and consumer price inflation hit 3%
(http://www.marketwatch.com/story/uk-inflation-hits-3-highest-rate-since-2012-2017-10-17),
a percentage point above the BOE target.
(END) Dow Jones Newswires
October 20, 2017 12:11 ET (16:11 GMT)
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