By Carla Mozee, MarketWatch Pound slides after dovish BOE
inflation report
LONDON (MarketWatch)--U.K. stocks fell on Wednesday, with
banking stocks lower after paying fines over allegations of
attempted rigging of the foreign-exchange market.
The FTSE 100 lost 0.3% to 6,611.04. On Tuesday, the index marked
a fifth gain in a row by rising 0.2%.
A total of $3.3 billion will be paid by five banks to U.S.,
British and Swiss regulators to resolve long-running investigations
into whether the banks engaged in activities in the
foreign-exchange markets to benefit their own trading positions,
sometimes at the expense of their clients.
The British and U.S. settlements were made by HSBC Holdings PLC,
Royal Bank of Scotland Group PLC, UBS AG (UBS), Citigroup Inc. (C)
and J.P. Morgan Chase & Co. (JPM). Read: 'Have that my son',
'Bravo'--chat logs from FX probe revealed (and it's no boring
read)
In London, shares of HSBC (HSBC) were down 0.3% while RBS (RBS)
dropped 1%.
The U.K. Financial Conduct Authority said HSBC Bank PLC was
fined GBP216.36 million ($343 million), and Royal Bank of Scotland
PLC was fined GBP217 million ($344 million). The Commodity Futures
Trading Commission meanwhile fined RBS $290 million and HSBC $275
million.
Shares of Barclays PLC (BCS) fell 2.2% as the bank pulled out of
late-stage settlement talks with regulators, saying it decided to
seek a "more general coordinated settlement."
Meanwhile, shares of J Sainsbury PLC stumbled 1.1% after the
supermarket chain swung to a pretax loss for the first six months
of its financial year and warned that profitability in the second
half will likely be lower than in the first half. Sainsbury is
planning additional investment to cut prices to lure in more
customers.
The British pound moved lower after the Bank of England cut its
forecasts for growth and inflation and signaled it is unlikely to
raise interest rates until the second half of next year. The pound
(GBPUSD) fell to $1.5818, from $1.5918 late on Tuesday.
Sterling briefly traded as high as $1.5944 on Wednesday,
according to FactSet, after U.K. government data showed wages rose
in the three-month period to September, while the unemployment rate
remained at 6%.
The reading of 6% slightly missed forecasts of a 5.9% reading.
The Office for National Statistics also said wages including
bonuses rose 1% year-over-year in the period, beating forecasts of
an improvement of around 0.9%.
Additionally, the Organization for Economic Cooperation and
Development said economic growth is set to slow in the U.K. and the
eurozone over the coming months.
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Our panel will be led by MarketWatch Columnist Matthew Lynn, a
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joined by Mark Hulbert, MarketWatch columnist and editor of the
Hulbert Financial Digest. This event is free, but RSVPs are
required. It will be held Wednesday evening, Dec. 3, in London. For
more information or to RSVP, send an email to
marketwatchevent@wsj.com
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