By Carla Mozee, MarketWatch
Bank shares rise on Brexit talk news; miners gain on upbeat
China data
London-listed bank shares climbed Friday after the president of
the European Commission said a breakthrough in the Brexit deadlock
had been made, clearing the way for negotiations to move on to the
next stage.
But the benchmark FTSE 100 was hurt by the rising pound, which
gained more strength after the news.
Elsewhere, mining shares rose after Chinese exports rose for the
ninth straight month, blowing past forecasts.
How markets are moving: The FTSE 100 index edged down 1.5 points
to 7,319.10, after opening fractionally higher. Financial and basic
material shares were among the sectors advancing, but the oil and
gas, consumer-related and utility groups were in the red.
On Thursday, the benchmark fell 0.4%
(http://www.marketwatch.com/story/ftse-100-heads-for-a-win-even-as-china-warning-drags-down-miners-2017-12-07).
For the week, the blue-chip index was on course to rise 0.2%, after
falling 1.5% last week.
The pound bought $1.3508 after hitting an intraday high of
$1.3521. That compares with $1.3475 late Thursday in New York.
Sterling was trading at its highest against the euro in six months,
fetching EUR1.1500, more than EUR1.1445 on Thursday.
The 10-year gilt yield rose 6 basis points to 1.312%, according
to Tradeweb. Yields rise when prices fall.
What's moving markets: Jean-Claude Juncker, the president of the
European Commission, said early Friday that "sufficient progress"
has been made
(http://www.marketwatch.com/story/breakthrough-on-brexit-terms-opens-way-to-next-phase-of-talks-2017-12-08)
on three key issues holding up the Brexit negotiations for the
talks to advance to the next stage.
"I believe we have now made the breakthrough we needed," Juncker
said at a press conference in Brussels.
The announcement comes after a night of intense negotiating for
British Prime Minister Theresa May, who managed to resolve the
final issue -- the Irish border -- needed to satisfy the EU
side.
The Brussels negotiating team is now recommending that EU
leaders give the go-ahead for the next stage when they meet Dec.
14-15.
A move to the second stage of talks would reduce the chances of
the U.K. exiting the bloc without a deal in 2019.
But the FTSE 100 was hampered by pound strength, as roughly 75%
of revenue for companies listed on the London index is generated
overseas.
What strategists are saying: "Today is a hugely significant step
forward towards exiting the EU in 2019, and while both sides will
be relieved at the progress, many more tough negotiations lie
ahead. But we can't underestimate how important today is," said
Craig Erlam, senior market analyst at Oanda.
But Erlam pointed out that sterling had backed away from
stronger gains.
"We've seen a rally in the pound over the last couple of weeks
on the expectation of a deal being agreed, so what we may be seeing
is simply a case of buying the rumor and selling the fact," he said
in a note.
Stock movers: London-listed bank stocks were higher on the
Brexit progress, as Friday's breakthrough brightens the prospects
the U.K. will maintain strong trade ties with the EU once it has
withdrawn.
Barclays PLC (BCS) (BCS) rose 2.1%, and Lloyds Banking Group PLC
(LLOY.LN)(LLOY.LN) jumped 3%. Royal Bank of Scotland Group PLC
(RBS.LN) (RBS.LN) added 1.6%.
In more modest moves, Standard Chartered PLC (STAN.LN) picked up
0.6%, and HSBC Holdings PLC (HSBA.LN) (HSBA.LN) was up 0.2%.
Shares of miners were mostly higher after fresh data showed
Chinese exports and imports grew in October
(http://www.marketwatch.com/story/chinas-exports-rise-for-9th-month-in-a-row-2017-12-08).
Chinese companies are key buyers of industrial and precious
metals.
Miner Fresnillo PLC (FRES.LN) gained 0.8%, and Glencore PLC
(GLEN.LN) pushed up 0.6%. But Randgold Resources PLC (RRS.LN) was
off 0.8%.
Economic data: An October reading on U.K. industrial production
is due at 9:30 a.m. London time, or 4:30 a.m. Eastern Time, from
the Office for National Statistics. Growth of 3.6% on an annual
basis is expected in a FactSet poll of economists.
Later, investors will shift attention to the U.S., where the
monthly jobs report is scheduled for release at 8.30 a.m. Eastern,
or 1.30 p.m. London time.
Read:Jobs boom likely carried over into November
(http://www.marketwatch.com/story/jobs-boom-likely-carried-over-into-november-2017-12-07)
(END) Dow Jones Newswires
December 08, 2017 04:21 ET (09:21 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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