By Carla Mozee, MarketWatch
Annual growth in house prices slows; May scrambles to nail
Brexit issue
U.K. stocks pared gains Thursday, with pressure on miners after
a warning that Chinese banks may not have enough capital to weather
potential losses. Investors watched for any news about Brexit
negotiations, especially about whether Prime Minister Theresa May
can bring warring allies into line over what should come next.
Deal news was brewing in the betting industry, sending shares of
Ladbrokes Coral PLC and William Hill PLC higher in the mid-cap
market.
What markets are doing: The FTSE 100 index was up just 3 points
at 7,351.23 after rising as much as 0.4%.
Consumer services, financial, utility and industry shares were
up, but that was nearly offset by losses for the basic materials,
oil and gas, consumer goods and tech groups. On Wednesday, the
benchmark rose 0.3%,
(http://www.marketwatch.com/story/ftse-100-veers-toward-second-straight-loss-with-miners-under-pressure-2017-12-06)
and a win Thursday would be its second in a row.
The pound came off session lows to trade at $1.3392, roughly in
line with $1.3394 late Wednesday in New York. Against the euro,
sterling bought EUR1.1369, turning higher compared with EUR1.1353
in the prior session.
"Against the dollar sterling managed to push back above $1.339
... while against the euro, the currency jumped 0.3% to cross
EUR1.136. This took the edge off of the FTSE's early gains," said
Connor Campbell, financial analyst at Spreadex, in a note
"As the last few days have proven, however, there is still
plenty of room for some pound-punishing Brexit volatility if any
fresh reports come out this afternoon," he said.
What's moving markets: The International Monetary Fund has
called for banks in China to bump up their capital buffers in the
wake of a credit boom in the world's second-largest economy. In a
review of China's financial system, the IMF said lenders may not
have enough capital to weather potential losses
(http://www.marketwatch.com/story/imf-warns-chinese-banks-may-be-short-on-assets-to-offset-potential-credit-losses-2017-12-06)
from those credit risks.
Mining stocks in the U.K. can be sensitive to developments in
China, where companies are big buyers of precious and industrial
metals.
Closer to home, worries over the progress of Brexit negotiations
and in particular the chances for a deal on the Irish border issue
have been weighing on the pound and aiding stocks. A weaker pound
can help shares of exporters on the FTSE 100, as it boosts the
value of foreign sales. Around 75% of revenue for the index's
components are generated overseas.
Investors are focused on whether the U.K. can nail a deal on the
Irish border, the last of three Brexit issues that have to be
resolved before Friday, a deadline set by lead EU negotiator Michel
Barnier
(https://www.theguardian.com/politics/2017/dec/06/uk-has-48-hours-to-agree-potential-deal-or-brexit-talks-cannot-progress).
EU leaders are meeting Dec. 14-15 in Brussels, where they will
assess whether sufficient progress in the U.K. withdrawal talks to
move onto the next stage of trade and transition arrangements.
U.K. Prime Minister Theresa May is working on a new proposal for
the Irish border that she will present by Thursday, Ireland's Prime
Minister Leo Varadkar said, according to media reports. A dispute
with May's Northern Ireland political allies over the issue of
whether to have a "hard" or "soft" border scuttled a potential deal
on Monday.
Housing shares: Shares of home builders held higher after
Halifax said U.K. house prices rose 0.5% in November from October,
marking a fifth monthly rise. But annual growth in house prices in
the three months to November slowed to 3.9% from October's 4.5%
reading.
Taylor Wimpey PLC (TW.LN) shares rose 0.7%, Persimmon PLC
(PSN.LN) gained 0.5%, Berkeley Group Holdings PLC (BKG.LN) tacked
on 0.1% and Barratt Developments PLC (BDEV.LN) was up a modest
0.1%.
Stock movers: In the basic materials sector, which makes up a
roughly 8% weighting on the FTSE 100, shares of Rio Tinto PLC (RIO)
(RIO) (RIO) fell 1.8% and Anglo American PLC (AAL.LN) lost 1%. BHP
Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) dropped 0.7% but
Antofagasta PLC (ANTO.LN) was up 0.4%.
Oil producers BP PLC (BP.LN) (BP.LN) and Royal Dutch Shell PLC
(RDSB.LN) (RDSB.LN) were each down 0.5% even as oil prices were
recovering from sharp declines on Wednesday
(http://www.marketwatch.com/story/oil-falls-on-rising-us-gas-supplies-2017-12-06-71032943).
Broadcaster Sky PLC (SKY.LN) rose 1.5%. CNBC reported this week
that Sky stakeholder 21st Century Fox Inc. (FOX) is closing in on a
deal to sell some assets to Walt Disney Co. (DIS) .
Ladbrokes Coral Group PLC (LCL.LN) surged 26% on the mid-cap
FTSE 250 index as the bookmaker is in GBP3.9 billion takeover talks
with GVC Holdings PLC
(http://www.marketwatch.com/story/ladbrokes-shares-jump-on-39-billion-takeover-talks-with-gvc-2017-12-07)(GVC.LN)
. GVC shares picked up 6.3% on the FTSE 250, which itself was up
0.1% at 19,856.77.
William Hill PLC (WMH.LN) , also a FTSE 250 component, climbed
3% as that bookmaker agreed to support Scientific Games Corp.'s
(SGMS) proposed acquisition of NYX Gaming Group Ltd. (NYX.V) . As
part of the agreement, William Hill plans to sell the 6.8 million
NYX ordinary shares it owns to Scientific Games.
(http://www.marketwatch.com/story/william-hill-to-back-scientific-gamess-buy-of-nyx-2017-12-07)
Other advancers on the FTSE 100 included publisher Pearson PLC
(PSON.LN) and telecom company BT Group PLC (BT.A.LN) , with shares
in each up 2.2%. Building materials company CRH PLC was up
1.1%.
(END) Dow Jones Newswires
December 07, 2017 06:49 ET (11:49 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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