LONDON MARKETS: FTSE 100 Loses Ground As Retailers Drop, With Fed Decision In Focus
21 Marzo 2018 - 11:11AM
Dow Jones News
By Carla Mozee, MarketWatch
U.K. wages data beats or meets, lifting hopes for BOE rate
rise
U.K. stocks dropped Wednesday, with investors seen as wary of
taking on risky bets before they find out whether the Fed is
ushering in another interest-rate hike.
Later, a report on the U.K. labor market will be watched for
signs of wage growth, after a disappointing inflation reading hurt
prospects for a Bank of England rate rise.
Retailers were among the worst performers on the London
benchmark, after a downbeat view on the U.K. from home improvement
chain Kingfisher PLC.
How markets are moving
The FTSE 100 index fell 0.3% to 7,042.80, led lower by the basic
materials and consumer services sectors. The utility and tech
sectors were modestly higher. On Tuesday, the index ended 0.3%
(http://www.marketwatch.com/story/ftse-100-rises-off-15-month-low-ahead-of-inflation-data-2018-03-20)
higher.
The pound traded at $1.4065, up from $1.3999 late Tuesday in New
York.
What's driving markets
The marquee event for global markets is the Fed's policy
decision, and markets have priced in expectations that it will
raise its benchmark rate by a quarter-percentage point. Investors
are watching for hints the U.S. central bank may hike rates four
times this year, compared with the three seen.
The Fed's monetary policy tends to drive financial markets
globally, as many companies do business in the word's largest
economy and it can lift borrowing rates for them. The decision is
due at 2 p.m. Eastern Time, or 6 p.m. London time. New Fed Chairman
Jerome Powell will hold his first post-announcement press
conference at 2:30 p.m. Eastern.
Check out:5 things to watch from the Fed decision
(http://www.marketwatch.com/story/5-things-to-watch-from-the-fed-decision-2018-03-19)
Official figures showed U.K. wage growth met or exceeded
forecasts in January. Investors were looking for a solid reading to
help prompt the Bank of England to raise interest rates in May,
after data on Tuesday showed inflation in February was lower than
expected. The Bank of England releases its policy decision on
Thursday.
Read:The pound's post-transition deal bounce might not be here
to stay
(http://www.marketwatch.com/story/the-pounds-post-transition-deal-bounce-might-not-be-here-to-stay-2018-03-19)
The pound gained after the release of the labor data. A stronger
pound can hurt stocks on the FTSE 100, as about 75% of revenue for
its multinational components is made overseas.
What strategists are saying
"While not currently in the Fed's guidance, just four votes are
required for the FOMC to take a more hawkish stance," said Mike van
Dulken, head of research at Accendo Markets.
"Furthermore, with Powell championing greater central banker
'transparency', he could surprise by announcing more regular press
conferences (outside the usual quarterly), opening the door for
more flexibility on hike timing and thus the full four increases
this year," he said in a note.
Stock movers
Kingfisher PLC shares (KGF.LN) tumbled 7.6% after the company
behind the Screwfix and B&Q stores posted a 10% fall in fiscal
2018 pretax profit fell 10% and said there's been a mixed
performance in key markets.
"The U.K. is more uncertain, France is encouraging yet volatile,
whilst the market in Poland remains supportive," said Kingfisher
CEO Véronique Laury.
Shares of other U.K.-based retailers fell alongside Kingfisher.
Whitbread PLC (WTB.LN), which runs Costa Coffee and Premier Inn
Hotels, lost 1.9%, and Next PLC (NXT.LN) , which sells apparel and
home furnishings, gave up 1.5%. Marks & Spencer Group PLC
(MKS.LN) move 1.1%.
Topping advancers, steel maker Evraz PLC (EVR.LN) tacked on
2%.
What's on the economic docket
U.K. average weekly earnings in January rose 2.8%, excluding
bonuses, compared with the reading of 2.6% expected. Wages
including bonuses were up 2.6%, meeting the forecast from a FactSet
survey of analysts.
The unemployment rate fell in January to a four-decade low of
4.3%, the Office for National Statistics said in its labor market
report. It was expected to hold at 4.4%.
(END) Dow Jones Newswires
March 21, 2018 05:56 ET (09:56 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
Grafico Indice FTSE 100
Da Feb 2024 a Mar 2024
Grafico Indice FTSE 100
Da Mar 2023 a Mar 2024