LONDON MARKETS: FTSE 100 Stays In The Red After Brexit Update Flips Pound Lower
March 20 2017 - 10:34AM
Dow Jones News
By Carla Mozee, MarketWatch
But blue-chip index still above 7,400, after reaching record
closes last week
U.K. stocks edged lower Monday, finding no relief after the
pound retreated on the U.K. government's announcement of when it
will trigger the start of the Brexit process.
The FTSE 100 shed 0.1% to 7,416.20, with oil and gas, mining and
financial shares among those losing ground. On Friday, the London
benchmark
(http://www.marketwatch.com/story/ftse-100-clings-onto-record-high-ahead-of-g-20-meeting-2017-03-17)rose
0.1% to 7,424.96, a record closing high. That was the index's
second close at a record in a row, and those moves helped the
blue-chip gauge gain 1.1% for the week.
"Equity markets are making a negative start to the week as a
significant dearth of macroeconomic and corporate news is leaving
investors with a lack of drivers," said Henry Croft, research
analyst at Accendo Markets, in Monday afternoon note.
Stocks remained stuck in the red even as the pound swung lower
after the U.K. government said British Prime Minister Theresa May
will trigger the Article 50 bill on March 29
(http://www.marketwatch.com/story/uk-prime-minister-to-trigger-start-of-brexit-process-on-march-29-2017-03-20)
to begin the process of leaving the European Union.
Read:Is the U.K. headed for a 'snap' election this year? Bookies
are more certain than ever
(http://www.marketwatch.com/story/is-the-uk-headed-for-a-snap-election-this-year-bookies-are-more-certain-than-ever-2017-03-20)
G-20 overhang: There was also gloom over the market following
the weekend's Group of 20 meeting of finance ministers and central
bankers in Baden-Baden, Germany.
(http://www.marketwatch.com/story/little-economic-common-ground-found-at-g-20-meeting-2017-03-19)
The "G-20 meeting revived worries about the U.S.'s trade
protectionism as finance chiefs were brought to drop a reference to
fight protectionism in their joint statement," said Ipek
Ozkardeskaya, senior market analyst at London Capital Group, in a
note.
"Several leaders were left frustrated with the U.S.'s position
regarding the global trade under Trump administration, including
China, Japan, Russia, Germany and France," she said.
Sterling: The pound's drop didn't push the FTSE 100 out of
negative territory. Blue-chips tend to rise when the pound falls,
as it boosts the prospects of stronger earnings and sales from
overseas for multinational companies.
Sterling came off session highs, buying $1.2393, little changed
from $1.2397 late Friday. The pound earlier on Monday hit an
intraday high of $1.2436, the first time in three weeks it traded
above $1.24. It notched an intraday low of $1.2364.
The "pound is caught between last week's dovish [rate] hike from
the Fed, the Bank of England's non-unanimous rate vote, where
Kristen Forbes signaled that she believes an increase is in order,
and Tuesday's inflation figure, which is set to cross the BOE's
long-held 2% target," wrote Connor Campbell, financial analyst at
Spreadex.
Stocks in focus: Shares of oil producers BP PLC (BP.LN) (BP.LN)
fell 0.8% and Royal Dutch Shell PLC (RDSB.LN)(RDSB.LN) lost 0.7% as
oil prices dropped,
(http://www.marketwatch.com/story/oil-falls-after-g-20-backtracks-on-anti-protectionist-language-2017-03-20)
with some analysts saying pressure came as the G-20 officials
dropped the group's stance against protectionism. West Texas
Intermediate oil fell more than 1% to trade closer to $48 a
barrel.
Associated British Foods PLC (ABF.LN) climbed 1.7% after Goldman
Sachs raised its rating on the company to buy from neutral, saying
its fashion retail unit Primark is returning to growth.
Unilever PLC (ULVR.LN) (ULVR.LN) is looking at a GBP6 billion
sale of its spreads business, which includes the Flora and Stork
brands, according to a Sunday Times report
(http://www.thetimes.co.uk/article/unilever-lines-up-6bn-sale-of-flora-and-stork-87bxxlnd2).
Shares were up 0.6%.
Vodafone Group PLC (VOD.LN) (VOD.LN) reached a deal to merge
most of its Indian operations with Idea Cellular Ltd
(http://www.marketwatch.com/story/vodafone-to-merge-india-unit-with-idea-cellular-2017-03-20-34851141).
(532822.BY), the country's third-largest mobile operator. Shares of
Vodafone were fractionally lower.
(END) Dow Jones Newswires
March 20, 2017 10:19 ET (14:19 GMT)
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