LONDON MARKETS: U.K. Markets Recoil From Boris Johnson
17 Maggio 2019 - 12:07PM
Dow Jones News
By Dave Morris
Anxiety about Boris Johnson's candidacy for U.K. Prime Minister,
and the implications for Brexit, depressed London markets
Friday.
How did markets perform?
The U.K.'s FTSE 100 declined 0.5% to 7,318.4. That nearly erased
Thursday's gain of 0.8%.
The pound, which swooned 0.6% Thursday on the latest Brexit
news, dipped an additional 0.1% Friday to $1.2778.
What's moving the markets?
Brexit appeared ready to heat up again on the back of three
related events. Talks between the Conservatives and Labour are
likely to break down Friday without a deal, with neither party
having conceded significant ground. Instead, U.K. Prime Minister
Theresa May pinned her hopes of her premiership surviving the
summer on a final vote on her unpopular Brexit deal, amid reports
that she would have to stand down if the bill were defeated. That,
and hard-core Brexiteer Boris Johnson's admission that he would "of
course" stand for the Conservative leadership, were taken by
currency markets to make a no-deal Brexit seem increasingly
likely--sending the pound sharply lower.
The China-U.S. trading narrative has dominated market commentary
this week. Chinese media have taken a hostile line in contrast with
the sunny platitudes issued by U.S. officials. Ministry of Commerce
spokesperson Gao Feng described the U.S.' recent tariff hike as
"bullying behavior"
(http://www.xinhuanet.com/english/2019-05/16/c_138064271_2.htm) and
said China had policy tools to wait out a protracted standoff.
Which stocks are active?
EasyJet PLC (EZJ.LN) shares climbed 4.5% even as it reported a
significant loss in its earnings for the first half of the year.
The U.K. budget airline reported a pretax loss of GBP272 million,
far worse than the GBP68 million reported in fiscal 2018.
Metro Bank PLC (MTRO.LN) jumped another 19.5% Friday after
rising nearly 15% Thursday. The upstart lender, which has been
struggling after miscalculating its regulatory requirements,
successfully raised GBP375 million in fresh capital, more than it
had originally targeted.
Just Eat PLC (JE.LN) was down 7.1% on reports that Amazon would
lead an investment round in Deliveroo
(http://www.marketwatch.com/story/amazon-to-lead-575-million-investment-in-uks-deliveroo-2019-05-17),
a rival restaurant-food delivery service.
(END) Dow Jones Newswires
May 17, 2019 05:52 ET (09:52 GMT)
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