LONDON MARKETS: FTSE 100 Slides To 2-month Low As Pound Rallies On Brexit Hopes
2017年12月1日 - 1:03AM
Dow Jones News
By Sara Sjolin, MarketWatch
Aviva climbs after lifting earnings forecast
U.K. stocks underperformed the broader European markets on
Thursday, put under pressure by another strong rally in the pound.
Sterling was rising on further signs of a breakthrough in the
Brexit negotiations.
What are markets are doing: The FTSE 100 index fell 0.4% to
7,359, building on a 0.9% loss from Wednesday and trading at around
a two-month low. For November, the U.K. benchmark was on track for
a 1.7% loss, which would be the biggest monthly drop since
June.
Meanwhile, sterling jumped to $1.3524, up from $1.3410 late
Wednesday in New York. The pound is now trading at its highest
level
(http://www.marketwatch.com/story/pound-rallies-on-brexit-hopes-as-dollar-looks-at-biggest-monthly-drop-since-july-2017-11-30)
in more than two months. Strength in sterling tends to weigh on the
FTSE, as around 75% of revenue for the index's components is
generated outside the U.K.
What's driving the market: The pound's rally came after The
Times newspaper said the U.K. is close to reaching an agreement
over Northern Ireland
(https://www.thetimes.co.uk/article/brexit-britain-close-to-irish-border-deal-pltcgrvcj)
with the European Union's Brexit negotiators. The report said
British officials earlier this week made a proposal to avoid a
"hard border" between the U.K. province and the Republic of
Ireland.
The EU has said it needs to see "sufficient progress" on the
Irish border before the withdrawal talks can move on to deal with
trade and a potential transition period. The two other issues are
EU citizens' rights and the size of the U.K.'s exit bill.
Earlier this week, media reports said London and Brussels had
agreed on a Brexit "divorce" bill of around EUR50 billion, after
U.K. Prime Minister Theresa May significantly raised the British
offer.
This developments on the exit bill and the Irish border are seen
as a breakthrough in the Brexit talks, which had reached a
deadlock. That in turn sparked fears the U.K. would end up crashing
out of the EU without a trade deal.
What strategists are saying: The Times said on Thursday the EU
now is prepared to offer the U.K. a two-year transition period as
early as January.
"This would be tremendously bullish for sterling," said Marshall
Gittler, chief strategist at ACLS Global, in a note.
Stock movers: Shares of Mediclinic International PLC (MDC.LN)
rose 3.6% after Jeffries upgraded the private hospital group to buy
from underperform.
BAE Systems PLC (BA.LN) (BA.LN) shares were up 2.8% after the
defense company said it does not expect new accounting standards
(http://otp.investis.com/clients/uk/bae_systems2/rns/regulatory-story.aspx?cid=288&newsid=953981)
to have a material impact on earnings.
But shares of home builder Persimmon PLC (PSN.LN) led the
decliners with a drop of 2.6% after a Nationwide reading on U.K.
home prices missed forecasts.
Shares of Greene King PLC (GNK.LN) dropped 2.6% after the pub
operator said revenue and profit fell in the first half
(http://www.marketwatch.com/story/greene-king-profit-rises-despite-fall-in-revenue-2017-11-30)
of its financial year.
Off the FTSE 100, shares of Daily Mail and General Trust PLC
(DMGT.LN) tanked 22% after the newspaper company said it swung to a
pretax loss
(http://www.marketwatch.com/story/daily-mail-swings-to-loss-on-impairment-charges-2017-11-30)
in fiscal 2017.
Economic data: U.K. consumers turned more pessimistic about the
country's economic situation and their own finances in November, a
survey from GfK U.K
(http://www.marketwatch.com/story/uk-shoppers-turn-more-gloomy-on-economy-gfk-2017-11-30).
showed. Its consumer confidence index dropped by two points to
stand at minus 1.
U.K. house prices were up
(http://www.marketwatch.com/story/uk-house-prices-tick-up-but-miss-forecasts-2017-11-30)
by a monthly 0.1% in November, Nationwide Building Society's data
showed, compared with October's 0.2% growth and a forecast
predicted gain of 0.2%. That was slightly below expectations and
continued the recent trend of small gains.
(END) Dow Jones Newswires
November 30, 2017 10:48 ET (15:48 GMT)
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