LONDON MARKETS: FTSE 100 Rises After Weak Retail Sales Throw August Rate Hike Into Question
19 Luglio 2018 - 11:46AM
Dow Jones News
By Sara Sjolin, MarketWatch
Pound slips below $1.30
U.K. stocks swung higher on Thursday and the pound tumbled after
disappointing British retail sales stoked speculation the Bank of
England may refrain from hiking interest rates in August.
What are markets doing?
The FTSE 100 index rose 0.2% to 7,689.90, after darting in and
out of losses earlier in the day.
Sterling slumped to an intraday low of $1.2983, hitting its
lowest dollar level since early September last year. A weaker pound
can boost the FTSE 100, as many of the index's multinational
companies generate most of their sales in other currencies.
What is driving the market?
The pound slump and FTSE rise came after a disappointing reading
on U.K. retail sales in June. Sales fell 0.5% month-on-month,
missing forecasts of a 0.3% rise. The quarterly data, however,
painted a more rosy picture, with sales up 2.1% in the second
quarter -- the largest increase since February 2015, according to
the Office for National Statistics.
The mixed report comes after June inflation numbers out
Wednesday missed forecasts, coming in at 2.4% versus the 2.6%
expected. The disappointing reading raised questions as to whether
the BOE will hike rates at its Aug. 2 meeting, as has been widely
expected. Analysts said, however, that the central bank is still
seen as raising rates next month, but then stay quiet on the
tightening front for a while.
What are analysts saying?
"The latest retail sales data for June present a confusing
picture for Mark Carney but he's unlikely to lose much sleep over
them. The wide range of forecasts ahead of today's 0.5% reduction
compared with May underscore the difficulty in reading much into
the short-term signals from the High Street," said Tom Stevenson,
investment director for Personal Investing at Fidelity, in a
note.
"With only a short time to go before the next Monetary Policy
Committee meeting, these figures probably won't change the bank's
calculations. These will continue to focus on weaker-than-expected
inflation and wage growth. An August rate hike is in the balance;
whether or not one is delivered, the trajectory thereafter will be
extremely shallow."
Which stocks are in focus?
Shares of WPP PLC (WPP.LN) slid 3.4% after the advertising
giant's competitor Publicis Groupe SA (PUB.FR) missed revenue
forecasts for the second quarter
(http://www.marketwatch.com/story/publicis-revenue-lags-views-on-health-care-miss-2018-07-19).
Publicis shares were down 7.4% in Paris.
SSE PLC (SSE.LN) fell 2.7% after the utility company reported
core earnings below expectations
(http://www.marketwatch.com/story/sse-profit-hit-by-warm-weather-2018-07-19),
saying warm weather had weighed on gas demand.
Unilever PLC (ULVR.LN) (ULVR.LN) rose 1% even after profit at
the consumer goods giant declined in the first half of 2018
(http://www.marketwatch.com/story/unilever-profit-sags-as-strike-hits-sales-growth-2018-07-19).
Anglo American PLC (AAL.LN) gave up 1.5% after a production
update
(http://www.marketwatch.com/story/anglo-american-total-production-grows-6-2018-07-19).
(END) Dow Jones Newswires
July 19, 2018 05:31 ET (09:31 GMT)
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