LONDON MARKETS: U.K. Stocks Pull Back After Longest Weekly Win Streak In 12 Years
14 Maggio 2018 - 6:22PM
Dow Jones News
By Sara Sjolin, MarketWatch
IWG soars 23% on takeover talks
U.K. stocks moved slightly lower on Monday, falling from a 3 1/2
-month high as investors absorbed the latest developments in the
U.S.-China trade talks and a rebound in the pound.
Shares of IWG PLC soared after the flexible-workplace company
said it's in talks with three rival private-equity firms about a
potential take over.
What are markets doing?
The FTSE 100 index slipped 0.2% to close at 7,710.98, pulling
back from its highest close sine Jan. 23 scored on Friday. Last
week, the London benchmark also logged its longest weekly winning
run since July 2005
(http://www.marketwatch.com/story/ftse-100-seeks-firm-direction-but-on-course-for-7th-weekly-advance-2018-05-11),
having advanced for seven straight weeks in a row.
The pound rose to $1.3598, compared with $1.3542 late Friday in
New York.
What is driving the market?
Investors in London took a breather on Monday after the recent
winning run that was boosted by a rally in oil companies and a drop
in the pound.
On Monday, sterling rebounded and in turn added pressure on the
FTSE's many multinational companies. About 75% of revenue for the
index is generated overseas so a stronger currency means actual
revenue shrinks when converted back into sterling.
Oil prices were lower earlier in the day but swung higher and
lifted U.K. energy firms into the close. Both West Texas
Intermediate crude and Brent jumped to their highest levels since
November 2014 last week after President Donald Trump said he'd pull
the U.S. out of the Iran nuclear deal and reintroduce sanctions
that could include the country's oil exports.
Traders were Monday also watching the latest developments in
trade talks between the U.S. and China. Trump was seen as paving
the way for constructive discussions with Beijing this week after
he over the weekend threw a lifeline to struggling Chinese telecom
giant ZTE
(http://www.marketwatch.com/story/trump-extends-lifeline-to-sanctioned-chinese-tech-company-zte-2018-05-13)(000063.SZ).
There were no major economic data on tap in the U.K. on Monday,
but unemployment data are due on Tuesday.
What are strategists saying?
"It's looking like one of those meaningless Mondays--well, in
Europe at least--with an empty economic calendar and the barest
pretence of movement from the markets," said Connor Campbell,
financial analyst at Spreadex, in a note.
"Granted, holding at a near 16-week, 7,720-crossing peak, the
FTSE can feel pretty pleased with itself, despite not actually
budging after the bell. If its recovery keeps going--something that
might be dependent on how sterling reacts to Tuesday's U.K. jobs
report--then a new all-time high might be on the cards, with the
index one final sprint away from the 7,800-teasing record set back
in the middle of January," he added.
Stock movers
Among oil companies, shares of Royal Dutch Shell PLC (RDSA.LN)
(RDSA.LN) and BP PLC (BP.LN) (BP.LN) both climbed 1.1%.
Centrica PLC (CNA.LN) climbed 1.4% after the utility company
said it is on track to hit its targets for 2018
(http://www.marketwatch.com/story/centrica-on-track-to-hit-full-year-targets-2018-05-14).
Shares in betting companies rallied following news of a U.S.
Supreme Court ruling
(http://www.marketwatch.com/story/shares-in-paddy-power-william-hill-climb-after-us-supreme-court-ruling-2018-05-14)
in favor of the state of New Jersey in a case that could open
sports betting around the nation. William Hill PLC (WMH.LN) jumped
11%, while Paddy Power Betfair PLC's stock added 12%
Outside the FTSE 100, IWG PLC (IWG.LN) surged 23% after the
company late Friday said it has received an approach from Lone Star
and two separate indicative proposals from Starwood Capital and TDR
Capital about a potential takeover
(http://www.marketwatch.com/story/iwg-soars-after-confirming-takeover-talks-with-3-rival-bidders-2018-05-14).
(END) Dow Jones Newswires
May 14, 2018 12:07 ET (16:07 GMT)
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