LONDON MARKETS: U.K. Stocks Poised For Closing Record As U.S.-China Ease Trade-war Tensions
21 Maggio 2018 - 4:48PM
Dow Jones News
By Sara Sjolin, MarketWatch
AstraZeneca rises after FDA approves Lokelma drug
U.K. stocks rose sharply on Monday, on track for a record close,
as traders welcomed news over the weekend that China and the U.S.
reached an agreement that eases trade tensions between the world's
two largest economies.
That optimism also sparked a rally in the dollar, which in turn
pulled the pound lower, with weakness in sterling helping lift the
British stock market.
What are markets doing?
The FTSE 100 index rose 1% to 7,853.54 setting it on track to
take out its previous closing high of 7,787.97, hit last Thursday.
It also hit an all-time intraday peak at 7,851.43 in Monday's
session.
The pound
(http://www.marketwatch.com/story/dollar-index-shoots-to-highest-level-since-late-2017-on-trade-optimism-2018-05-21)
fell to $1.3432 from $1.3466 late Friday in New York. A weaker
pound tends to boost the FTSE 100, as the index's components
conduct the bulk of their business overseas and a softening in
sterling lifts revenue when converted back into the U.K.
currency.
What is driving the market?
The upbeat trading mood in stocks came after Beijing and
Washington agreed to drop their tariff threats. U.S. Treasury
Secretary Steven Mnuchin said on Sunday that the U.S.
administration would put the trade war with China "on hold"
(http://www.marketwatch.com/story/mnuchin-china-trade-war-on-hold-while-deal-hammered-out-2018-05-20)
while the two countries work on a deal to reduce the U.S.'s trade
deficit with the Chinese. Meanwhile, China agreed to buy more U.S.
products
(http://www.marketwatch.com/story/china-balks-at-specific-targets-for-reducing-trade-surplus-with-us-2018-05-19),
but without specifying a dollar amount.
What are strategists saying?
"It looks like progress on talks between China and the U.S.
means we are not about to descend into a punitive trade war. Whilst
there is still long way to go, and nothing is agreed until
everything is agreed, there has undoubtedly been solid progress and
the sense of relief in equity markets is palpable," said Neil
Wilson, chief market analyst at Markets.com.
"But we must note that the FTSE's gains of late are probably
more attributable to a weaker pound as the dollar rallies across
the board," he added.
Which stocks are in focus?
Shares of AstraZeneca PLC (AZN.LN) (AZN.LN) rose 3.2% after the
drug giant said the U.S. Food and Drug Administration has approved
Lokelma
(http://www.marketwatch.com/story/astrazenecas-lokelma-gets-fda-approval-2018-05-21)
for the treatment of adults with hyperkalemia.
International Consolidated Airlines Group SA (IAG.LN) (IAG.LN)
added 1.6% after reports the British Airways-parent is planning to
make a EUR1.52 billion offer for Norwegian Air Shuttle ASA
(http://www.marketwatch.com/story/iag-plans-to-offer-152-bln-for-norwegian-report-2018-05-21)(NAS.OS).
Marks & Spencer Group PLC (MKS.LN) (MKS.LN) gained 2.8%
after a report in the Sunday Times that the retailer will announce
more store closures
(http://www.marketwatch.com/story/marks-spencer-to-close-more-stores-report-2018-05-21)
when it releases results on Wednesday.
Randgold Resources Ltd. (RRS.LN) (RRS.LN) fell 1.5% as gold
prices fell on the back of the rising dollar and improved risk
sentiment.
In Ireland, Ryanair Holdings PLC (RYAAY) (RYAAY) initially
declined, but then swung higher to gain 5%. The volatile action
came the budget airline posted a 10% rise in full-year profit but
also warned on 2019 profit
(http://www.marketwatch.com/story/ryanair-warns-on-2019-profit-over-fares-oil-costs-2018-05-21)
due to higher oil prices and pressure on fare prices.
(END) Dow Jones Newswires
May 21, 2018 10:33 ET (14:33 GMT)
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