LONDON MARKETS: U.K. Stocks End Slightly Higher, But Post Biggest Weekly Drop Since March
17 Agosto 2018 - 6:46PM
Dow Jones News
By Mark DeCambre, MarketWatch , Ryan Vlastelica
The U.K.'s main stock index ended the session slightly higher on
Friday, but the benchmark posted its biggest weekly percentage drop
in months as investors found few reasons to be confident into the
weekend with a number of major political uncertainties up in the
air.
In addition to recent concerns about Turkey's currency crisis,
the possibility of a so-called hard Brexit returned to the
forefront of investor sentiment. Market participants are concerned
that the next phase of talks for Britons in protracted negotiations
to exit from the European Union will result in leaving the bloc
without a defined trading arrangement.
How markets are performing
The FTSE 100 rose less than 0.1% to close at 7,558.59. For the
week, it fell 1.4% in its biggest decline since the week ended
March 23, according to FactSet data.
The British pound was slightly higher against the dollar, buying
$1.2737, compared with $1.2712 late Thursday in New York.
What's moving markets
London Mayor Sadiq Khan reportedly told city officials to start
making preparations for a no-deal Brexit to determine if the city
could deal with potential shortages of medicines and food,
underscoring worries that continuing negotiations between the EU
and Britain may prove unsuccessful.
Khan in an article in the Guardian
(https://www.theguardian.com/politics/2018/aug/17/sadiq-khan-london-resilience-forum-must-prepare-no-deal-brexit-food-medicine-shortages)
accused the government of "dragging its feet" and leaving EU
citizens in limbo.
Meanwhile, U.K. Foreign Secretary Jeremy Hunt, speaking in the
Netherlands, told ITV News that the U.K. would "find a way to
prosper and thrive" in the event of no deal, but said it would
represent
(https://www.telegraph.co.uk/politics/2018/08/16/jeremy-hunt-warns-no-deal-brexit-would-amistake-generations/)a
"huge geo-strategic mistake."
In addition, volatility in the commodities sector were a key
source of concern. The sector has been pressured by worries about
global trade, and a possible knock-on effect in emerging markets
from gyrations in Turkey .
Antofagasta Plc (ANTO.LN), one of the market's recent biggest
underperformers, fell 1.9% as the biggest percentage decliner on
Friday. Thus far in August, it has shed nearly 20% of its
value.
Such issues overshadowed some positive economic news. A report
on July U.K. retail sales showed a monthly increase of 3.5%,
compared with the 2.6% gain that had been expected. Excluding fuel,
they were up 3.7%, above the 3.0% consensus forecast.
Don't miss:A top London startup's CEO flags the biggest Brexit
threat to his industry
(http://www.marketwatch.com/story/a-top-london-startups-ceo-flags-the-biggest-brexit-threat-to-his-industry-2018-08-06)
What are strategists saying?
"Traders will be watching keenly for any headlines indicating
the likelihood of the U.K. crashing out of Europe without a deal,"
said Jasper Lawler, head of research at London Capital Group.
Marios Hadjikyriacos, investment analyst at brokerage XM, in a
research note on Friday said "the British pound barely advanced,
largely unable to capitalize on strong U.K. retail sales figures.
All eyes remain on the Brexit talks, where we may get some fresh
comments today."
"Continued lack of progress could confirm the current
pessimistic narrative and hence keep the currency at current low
levels, or even trigger some further moderate losses. In contrast,
any hints the negotiations are moving forward may come as a
positive surprise, leading to an outsized relief bounce," he
added.
Stocks in focus
Among notable gainers, RSA Insurance Group (RSA.LN) ended up
1.7% while British American Tobacco (BATS.LN) closed 1.2%
higher.
On the downside, Next Plc (NXT.LN) lost 1.1% and Standard
Charter Plc (STAN.LN) ended off 0.9%.
Shares of Royal Bank of Scotland Group PLC (RBS.LN) ended up
0.1% after being upgraded by HSBC bank analysts.
(END) Dow Jones Newswires
August 17, 2018 12:31 ET (16:31 GMT)
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