LONDON MARKETS: U.K.'s FTSE 100 Stumbles After Three-day Advance
November 23 2017 - 4:22AM
Dow Jones News
By Victor Reklaitis, MarketWatch
British gas parent Centrica dives, leading the way lower for
blue-chip stocks
British blue-chip stocks slumped Thursday following a three-day
move higher, led lower in morning action by a plunge for British
Gas parent Centrica PLC after its disappointing financial
update.
Traders continued to ponder the Autumn Budget presented
Wednesday by Chancellor of the Exchequer Philip Hammond, which
included downgrades to the government's forecasts for U.K. economic
growth
(http://www.marketwatch.com/story/ftse-100-on-course-for-3rd-straight-gain-with-uk-budget-on-deck-2017-11-22).
What markets are doing: The FTSE 100 index fell by 0.5% to
7,381.14, giving up ground after rising 0.5% over the past three
sessions to an almost two-week high
(http://www.marketwatch.com/story/ftse-100-edges-lower-as-brexit-hopes-buoy-pound-2017-11-21).
The gauge is up about 3% for the year, lagging the Stoxx Europe
600's advance of 7% and the U.S. S&P 500's rally of 16%.
The pound changed hands at $1.3311, down slightly from $1.3324
late Wednesday in New York. The currency is up about 0.7% for the
week, stretching its year-to-date gain to nearly 8%. It remains
well below the $1.50 level that it hit just before the U.K.'s June
2016 vote to leave the European Union, or Brexit.
See:How German political turmoil could hurt the pound more than
the euro
(http://www.marketwatch.com/story/heres-why-german-political-turmoil-could-hurt-sterling-more-than-the-euro-2017-11-21)
What strategists are saying: "Although on the face of it the
downgrade to the U.K. growth forecasts and the weak productivity
theoretically should be bad news for sterling, the market is most
likely pricing out the probability of a collapse in the
government," said Kathleen Brooks, research director at City Index,
in a note.
"Hammond's generally well-received performance is the first
solid piece of good news for [Prime Minister] Theresa May after a
torrid month," she added.
Stock movers: Centrica shares (CNA.LN) dived 17% for the FTSE
100's biggest drop after the utility company warned that its energy
supply businesses have had a disappointing second half
(http://www.marketwatch.com/story/centrica-says-on-track-to-hit-2017-targets-2017-11-23).
It also gave a full-year adjusted earnings outlook that was below
the market consensus.
Severn Trent PLC shares (SVT.LN) gained 1% after the water
company reported a slight rise in interim profit before tax and
raised its dividend
(http://www.marketwatch.com/story/severn-trent-profit-rises-on-increased-turnover-2017-11-23).
The Autumn Budget out yesterday whacked home-builder shares, as
it included plans to move toward taking land from developers who
fail to build houses. Those stocks were recovering somewhat early
Thursday.
Barratt Developments PLC (BDEV.LN) traded up by 1.8%, Berkeley
Group Holdings PLC (BKG.LN) gained 1.5%, and Persimmon PLC (PSN.LN)
added 1.6%.
What else could help move markets: A fresh estimate on British
third-quarter growth in gross domestic product is due at 9:30 a.m.
London time, or 4:30 a.m. Eastern Time. Economists polled by
FactSet expect a quarter-over-quarter expansion of 0.4% and
year-over-year growth of 1.5%.
(END) Dow Jones Newswires
November 23, 2017 04:07 ET (09:07 GMT)
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