UKX FTSE 100 Index

By Victor Reklaitis, MarketWatch

Micro Focus shares plunge as CEO exits; Hammerson's stock soars after takeover offer

U.K. blue-chip stocks lost ground Monday, adding to the prior week's drop, with analysts pinning the retreat in part on expectations that the Bank of England and the U.S. Federal Reserve will signal this week how their monetary policies may be tightening.

Micro Focus International PLC's stock was the FTSE 100's biggest loser as the software maker warned on its outlook and said its CEO has resigned.

How markets are moving

The FTSE 100 index fell 1% to 7,089.80. The British benchmark gave up 0.8% last week, pulling back from a potentially deeper weekly loss by gaining modestly on Thursday and Friday.

The pound bought $1.3951, up from $1.3944 late Friday in New York.

What's driving markets

Investors have been worrying this month about a potential global trade war, and central banks have the attention of markets as well. A BOE monetary policy decision is expected on Thursday after a U.S. Fed decision on Wednesday.

The trade concerns come as the Trump administration takes a hawkish stance on U.S. trade with China and moves ahead with tariffs on foreign steel and aluminum.

The progress of the Brexit talks is also in focus, ahead of the EU leaders' summit on Thursday and Friday, which investors will be watching for signs of a transition deal.

What strategists are saying

"While investors remain concerned about tensions between the U.S. and the rest of the world over trade, it's also set to be an important week for the U.S. and U.K. economies, with the U.S. central bank set to pull the trigger on another rate increase this week at a time when some early concerns about rising inflation have subsided to a certain extent," said Michael Hewson, chief market analyst at CMC Markets UK, in a note.

"The U.K. is facing an important week, and while no changes in monetary policy are expected on Thursday, the latest inflation numbers, due tomorrow, along with wages on Wednesday, are expected to point to a narrowing gap between the two which could be supportive of a possible tightening of interest-rate policy in the coming months," Hewson added.

Read:Pound could surge in 'frenetic' week of Brexit and BOE news, ING says (http://www.marketwatch.com/story/pound-could-surge-in-frenetic-week-of-brexit-and-boe-news-ing-says-2018-03-16)

Stock movers

Micro Focus shares (MCRO.LN) dived 51% after the company said CEO Chris Hsu has resigned and warned that revenue for fiscal 2018 will fall more than previously anticipated.

On the upside, Hammerson PLC shares (HMSO.LN) soared 26% for the FTSE 100's biggest gain. The move came after the mall owner drew and rejected a 4.9 billion-pound takeover offer (http://www.marketwatch.com/story/klepierre-makes-49-bln-hammerson-takeover-step-2018-03-19) from French real-estate investment company Klepierre SA (LI.FR) , whose shares were down 4%.

(END) Dow Jones Newswires

March 19, 2018 05:17 ET (09:17 GMT)

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