LONDON MARKETS: FTSE 100 Faces 4th Loss As Pound Rises, Primark-owner Falls
18 Gennaio 2018 - 10:44AM
Dow Jones News
By Carla Mozee, MarketWatch
Pound inches closer to $1.40
U.K. stocks slipped Thursday, with pressure on London's
blue-chips benchmark coming from continued strength in the pound
and a decline in shares of Primark chain operator Associated
British Foods following a trading update.
How markets are moving: The FTSE 100 index was down 0.1% at
7,717.69, led by losses for telecom and utility shares. But the
basic materials and consumer-services sectors gained ground. The
index was on course for a fourth straight losing session. Last
week, it hit an all-time closing high of 7,778.64.
The pound traded at $1.3842, up from $1.3830 late Wednesday in
New York.
What's driving markets:The FTSE 100 lagged behind other European
equity benchmarks in early Thursday trade in part as the pound
continued to scale at levels against the U.S. dollar not seen since
the 2016 Brexit referendum. Sterling is on track for its fifth gain
in six sessions and has picked up roughly 0.9% this week.
Sterling strength can hurt shares of multinational companies on
the FTSE 100 as a stronger pound can dent earnings made overseas.
About 75% of revenue generated by FTSE 100 companies comes from
international markets.
"Whilst we should see GBP/USD break through 1.40 this year it
has to be driven and buoyed by either a pick up in the U.K. economy
and an interest rate hike, or major developments towards a
favorable Brexit with Single Market access," said Hamish Muress,
currency analyst at OFX, in a note.
Read:Why one contrarian investor says the British pound could
rally to $1.40 in 2018
(http://www.marketwatch.com/story/why-one-contrarian-investor-says-the-british-pound-could-rally-to-140-in-2018-2018-01-17)
Meanwhile, mining shares were modestly higher after
better-than-expected growth and industrial output figures from
China
(http://www.marketwatch.com/story/china-industrial-output-rises-62-beating-views-2018-01-18),
a major buyer of industrial and precious metals. But Chinese retail
sales growth of 9.4% missed expectations.
Stock movers: Associated British Foods PLC shares (ABF.LN) fell
1% as the company posted a drop in revenue from its sugar business
(http://www.marketwatch.com/story/ab-foods-revenue-up-as-primark-offsets-sugar-fall-2018-01-18)
during the 16-week period to Jan. 6. The company said, however,
that fall was countered by a sales increase at its Primark fashion
arm. AB Foods left its full-year outlook unchanged.
"Sales at the budget clothing chain improved 9% year-on-year, a
record for the Christmas period, however, accounting for constant
FX, the numbers were a little less impressive 7%," said Henry
Croft, research analyst at Accendo Markets, in a note.
Whitbread PLC (WTB.LN) pushed up 1.4% as the company, which runs
the Costa Coffee and Premier Inn brands, said it's on track to meet
its full-year expectations.
In the mining group, Glencore PLC (GLEN.LN) rose 0.5% and Rio
Tinto PLC (RIO) (RIO) (RIO) picked up 0.4% but Randgold Resources
PLC (RRS.LN) (RRS.LN) was off 0.8%.
Among other decliners, mobile services provider Vodafone Group
PLC (VOD.LN) (VOD.LN) and telecom services company BT Group
(BT.A.LN) (BT.A.LN) fell 1.9% and 1.1%, respectively.
Off the FTSE 100, shares of Countrywide PLC (CWD.LN) fell 17%
after the real-estate agent forecast a 9% drop in 2017 profit
(http://www.marketwatch.com/story/countrywide-slumps-17-after-disappointing-q4-performance-2018-01-18).
Economic news:U.K. house prices bounced back in December
(http://www.marketwatch.com/story/uk-house-prices-bounce-back-rics-survey-2018-01-18),
with the Royal Institution of Chartered Surveyors saying its
monthly reading came in at a plus 8. Analysts polled by The Wall
Street Journal expected, on average, the index to slip further, to
minus 2.
(END) Dow Jones Newswires
January 18, 2018 04:29 ET (09:29 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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