LONDON MARKETS: U.K. Stocks Log Fifth Win In Past 6 Sessions As Brexit Blueprint Takes Focus
July 12 2018 - 1:22PM
Dow Jones News
By Sara Sjolin, MarketWatch
Sky shares rally after Comcast raises takeover bid
U.K. stocks finished in the green Thursday, rebounding from its
worst loss in more than two weeks, with Sky shares leading the
charge as the bidding war for the broadcaster intensified.
Prime Minister Theresa May delivered a so-called white paper
that outlines Britain's plans to extricate itself from the European
Union, which she said "delivers on the Brexit people voted for
(https://www.bbc.com/news/uk-politics-44807741)."
What are markets doing?
The FTSE 100 index climbed 0.8% to 7,651.33, clawing back parts
of its 1.3% loss logged on Wednesday
(http://www.marketwatch.com/story/ftse-100-slides-more-than-1-as-us-seeks-more-tariffs-on-goods-from-china-2018-07-11).
The drop--its worst since June 25--came after the U.S. said it
plans to hit Chinese imports with another $200 billion in tariffs,
intensifying a trade fight between the world's largest economies.
Still, the U.K. benchmark has closed higher five of the past six
trading sessions.
The pound rose to $1.3219 from $1.3205 late Wednesday in New
York.
What is driving the market?
Stocks in the U.K. and Europe
(http://www.marketwatch.com/story/european-stocks-stage-small-rebound-after-trade-driven-selloff-2018-07-12)
traded higher as investors continued to watch developments in the
trade spat between the U.S. and China. Late Wednesday Bloomberg
reported that U.S. and Chinese officials are open to resuming
high-level trade talks
(https://www.bloomberg.com/news/articles/2018-07-11/u-s-china-trade-talks-said-to-stall-as-tariff-dispute-escalates),
which could end with a bilateral solution and avoid an economical
deleterious trade clash.
Back in the U.K., the 120-page report on Brexit lays out in more
detail May's plan for the U.K.'s future relationship with the
European Union, which was agreed at a Cabinet meeting last
week.
The plan, however, sparked a revolt in the government's inner
circles, with both Foreign Secretary Boris Johnson and Brexit
minister Davis Davis resigning in protest over May's vision.
In other U.K. news, U.S. President Trump arrived in Britain on
Thursday for a two-day visit.
What are strategists saying?
"As we've been noting, the devil will be in the details (which
may take a while to digest)--but for GBP's initial reaction over
the coming days, one should focus on the EU's response to May's
Brexit plan. If Brussels feel that they can work with Downing
Street, then GBP/USD could drift back to 1.33-1.34. If not, then
there are major risks of a sharp fall to below 1.30 as risks of a
'no deal' Brexit pick-up," said Viraj Patel, FX strategist at ING,
in a note. Sterling's reaction thus far has been muted after the
release of the Brexit white paper.
Stock movers
Shares of Sky PLC (SKY.LN) rose 3.4% after Comcast Corp. (CMCSA)
raised its takeover offer
(http://www.marketwatch.com/story/comcast-raises-bid-for-sky-after-latest-fox-offer-2018-07-11)
for the British broadcaster, heating up the bidding war with 21st
Century Fox Inc. (FOXA).
Shares of ITV PLC (ITV.LN) fell 1% after England's defeat in the
World Cup soccer final. Chris Beauchamp, chief market analyst at
IG, said ITV's decline came as "investors cut back on the stock on
expectations that advertising revenue will be lower than would have
been the case with England in the finals."
Outside the FTSE 100, ASOS PLC (ASC.LN) tumbled by 11% after the
online clothing retailer cut its guidance as sales growth slowed
(http://www.marketwatch.com/story/asos-cuts-guidance-as-sales-growth-slows-2018-07-12).
(END) Dow Jones Newswires
July 12, 2018 13:07 ET (17:07 GMT)
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