LONDON MARKETS: FTSE 100 Knocked Back As Banks Fall, Pound Surges
14 Luglio 2017 - 06:49PM
Dow Jones News
By Sara Sjolin, MarketWatch
Blue-chips benchmark on track for weekly rise
U.K. stocks fell Friday, rounding off a winning week overall for
London blue-chips with losses for bank stocks and a 1% surge by the
British pound against the U.S. dollar.
The FTSE 100 index fell 0.5% to end at 7,378.39, with only the
basic materials and tech groups notching gains. Financial shares
put in the worst performance.
For the week, the index benchmark finished up 0.4%. Stocks had
posted strong advances during the week after U.S. Federal Reserve
Chairwoman Janet Yellen indicated that interest rates for may not
have to rise much further to achieve a neutral policy stance.
But the FTSE's decline on Friday worsened as the session wore
on.
"The scene was set when the U.S. posted inflation and retail
sales numbers which came in below expectations, and then when the
preliminary University of Michigan consumer sentiment dropped, the
FTSE 100 tumbled due to the spike in sterling," wrote CMC Markets
analyst David Madden.
Read:What inflation? Consumer prices flat in June, CPI shows
(http://www.marketwatch.com/story/inflation-goes-nowhere-in-june-cpi-shows-2017-07-14)
The pound packed on more than 1%, reaching an intraday high of
$1.3094, to put itself of course for its highest settlement of the
year. The pound on July 3 reached an intraday high of $1.3175,
according to FactSet data.
A stronger pound can hurt shares of multinationals on the FTSE
100 as those companies make the bulk of their revenue and earnings
in overseas markets. Among such companies, luxury-goods maker
Burberry Group PLC (BRBY.LN) fell 1.4% and cruise-ship operator
Carnival PLC (CCL.LN) gave up 1.3%.
"The powerful pound aside, the FTSE 100 would be further in the
red if it wasn't for the likes of Fresnillo, Randgold Resources,
Anglo American, Glencore and Rio Tinto. The weakness in the U.S.
dollar has pushed up silver, gold and copper prices," that are
dollar-denominated, and in turn, supported gains for mining
companies, Madden said.
Topping the FTSE 100, shares of diversified miner Anglo American
PLC (AAL.LN) popped up 2.1%. Copper producer Fresnillo PLC
(FRES.LN) rose 1.6%, Randgold Resources Ltd. (RRS.LN) added 1.3%
and Rio Tinto PLC (RIO) (RIO) (RIO) tacked on 0.8%. Glencore PLC
(GLEN.LN) ended 0.5% higher.
Sterling bought $1.2940 late Thursday, when it jumped following
hawkish comments from Bank of England policy maker Ian McCafferty,
who called for an early unwinding of the central bank's
quantitative easing program.
A reading on U.K. inflation in June will be released Tuesday.
The rate hit 2.9% in May, the highest reading in four years, as
prices for imported goods such as cars and some food have increased
on the back of sterling's plunge in the wake of last year's Brexit
referendum.
Banks: U.K. bank shares followed losses for their peers on Wall
Street Friday
(http://www.marketwatch.com/story/financial-etf-seeing-worst-day-in-2-months-after-weak-bank-results-2017-07-14).
Investors pored over the first wave of financial results for the
second-quarter earnings season for any read-through on what could
be in store for U.K. and European lenders, many of which have U.S.
operations.
J.P. Morgan Chase & Co. (JPM), Citigroup Inc. (C) and Wells
Fargo & Co. (WFC) each posted higher-than-anticipated profit,
but they also reported weaker trading revenue, falling short of
what analysts had expected.
In London, Royal Bank of Scotland Group PLC (RBS.LN) (RBS.LN)
fell 1.7%, HSBC Holdings (HSBA.LN) (HSBA.LN) declined 1.4% and
Barclays PLC (BCS) (BCS) flopped down 1.3%. Standard Chartered PLC
(STAN.LN) gave up 0.9% and Lloyds Banking Group PLC (LLOY.LN) ended
0.7% lower.
Stock movers: Sky PLC shares (SKY.LN) finished 0.5% lower as
investors watched for news on whether the GBP11.7 billion proposed
takeover of the telecom and media company by 21st Century Fox (FOX)
would be referred to the U.K.'s competition authority. Sky shares
dropped 2.1% on Thursday following a Guardian newspaper report
(https://www.theguardian.com/media/2017/jul/13/rupert-murdoch-will-not-offer-new-sky-deal-to-culture-secretary)
that 21st Century wouldn't offer further concessions to Britain's
culture secretary to fast track the proposed deal.
Shares of AstraZeneca PLC (AZN.LN) (AZN.LN) fell 0.3%, adding to
a 3.5% loss from Thursday. The weakness came following reports
Chief Executive Pascal Soriot was set to become CEO of Teva
Pharmaceutical Industries Ltd. (TEVA).
Brexit news: The U.K. government late Thursday published its
first draft legislation on Brexit
(https://www.wsj.com/articles/british-bill-sets-up-more-brexit-strife-1499962246),
designed to revoke a 1972 law that made European Union law
applicable in the U.K. The bill marks the first step in what is
expected to be a tough battle negotiating the U.K.'s exit from the
EU.
The government also for the first time explicitly acknowledged
it has financial obligations to the EU--the so-called exit
bill--that will need to be resolved. The exit bill has been a major
point of contention, with U.K. Foreign Secretary Boris Johnson
saying the EU can "go whistle" if it demands "extortionate sums".
(http://news.sky.com/story/boris-johnson-eus-exit-bill-demand-extortionate-10944564)
(END) Dow Jones Newswires
July 14, 2017 12:34 ET (16:34 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Grafico Indice FTSE 100
Da Feb 2024 a Mar 2024
Grafico Indice FTSE 100
Da Mar 2023 a Mar 2024