LONDON MARKETS: FTSE 100 Searches For Impetus, With Retail Sales Data On Deck
May 24 2018 - 4:28AM
Dow Jones News
By Sara Sjolin, MarketWatch
Pound rebounds from 2018 low
U.K. stocks swung between small gains and losses early on
Thursday, with traders remaining cautiously on the sidelines ahead
of a reading on retail sales, which could influence the path for
U.K. interest rates.
What are markets doing?
The FTSE 100 index rose 0.1% to 7,793.92, slightly rebounding
after a 1.1% loss Wednesday.
The pound climbed to $1.3366 from $1.3348 late Wednesday in New
York. Sterling fell to a fresh 2018 low on Wednesday, after
official figures showed U.K. inflation unexpectedly fell in April,
which dampened expectations for a Bank of England interest rate
rise in the summer.
What is driving the market?
The muted action in London came as traders waited for the latest
U.K. retail sales data, due at 9:30 a.m. London time, or 4:30 a.m.
Eastern Time. Economists expect a 0.4% drop year-on-year in April,
but a flat reading month-on-month.
Investors in the U.K. are watching data releases closely, after
BOE Governor Mark Carney made clear recently that the central
bank's next policy move depends on an improvement in British
economic health.
More broadly, traders were still digesting the minutes from the
U.S. Federal Reserve's May 1-2 meeting, which were released late
Wednesday. The minutes suggest the U.S. central bank is on track to
hike interest rates in June and is keeping calm about the inflation
outlook.
Staying in the U.S., President Donald Trump rekindled concerns
of a global trade war, announcing an investigation that could lead
to import tariffs on cars
(http://www.marketwatch.com/story/trump-administration-mulls-tariffs-of-up-to-25-on-imported-autos-2018-05-23).
What are strategists saying?
"After Wednesday's surprise decline in headline inflation
illustrated a return to the Goldilocks (not too hot, not too cold)
economy, it will take a decent surprise to the upside in today's
retail sales to even come close to convincing some pound traders
that August's hike remains a possibility," said Jasper Lawler, head
of research at London Capital Markets, in a note.
"Should the data beat, the pound could comfortably find itself
through $1.34, whilst a disappointing read could quickly send the
pound back to test $1.33," he added.
Stock movers
Shares of Tate & Lyle PLC (TATE.LN) rose 4.2% after the food
ingredients maker said adjusted profit rose 13%
(http://www.marketwatch.com/story/tate-lyle-profit-rises-plans-100-mln-cost-cuts-2018-05-24)
in the last fiscal year.
Kingfisher PLC (KGF.LN) fell 3% after the do-it-yourself
retailer
(http://www.marketwatch.com/story/kingfisher-sales-drop-as-cold-hits-footfall-2018-05-24)
said first-quarter sales fell due to bad weather.
Shares of Daily Mail & General Trust PLC (DMGT.LN) lost 3.9%
after the newspaper publisher reported a drop in revenue in the
first half of fiscal 2018
(http://www.marketwatch.com/story/daily-mail-general-trust-pretax-profit-jumps-2018-05-24).
(END) Dow Jones Newswires
May 24, 2018 04:13 ET (08:13 GMT)
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