LONDON MARKETS: U.K. Stocks Pull Back From Record, As Pound Sails To 2-week High
13 Octobre 2017 - 10:31AM
Dow Jones News
By Carla Mozee, MarketWatch
U.K. stocks fell Friday, under pressure as the pound climbed to
a nearly two-week high on prospects for a smoother exit for Britain
out of the European Union.
The FTSE 100 index gave up 0.4% to 7,527.75, with only the basic
materials sector showing a gain. The index was looking at a flat
move for the week.
"U.K. stocks began the session downbeat. The correction could
deepen into the weekly closing bell as Brexit uncertainties loom
before [the] October 19/20 summit in Brussels, while the pound is
subject to upside pressures," said LCG senior market analyst Ipek
Ozkardeskaya in a note.
Brexit hopes lift sterling: The London benchmark fell as the
pound climbed above $1.33 for the first time since Oct. 2,
according to FactSet data. Sterling was pushed higher after German
newspaper Handelsblatt late Thursday
(http://www.handelsblatt.com/my/politik/international/brexit-galgenfrist-fuer-london/20446710.html)
reported that the EU may offer a two-year Brexit transition deal to
Britain.
On Thursday, the pound dropped below $1.32 after Michel Barnier,
the EU's chief Brexit negotiator, said not enough progress had been
made for the EU and the U.K. to start discussing their future trade
relationship. The pound's slide helped usher the FTSE 100 to an
all-time record close, with a rise of 0.3% to 7,556.24
(http://www.marketwatch.com/story/ftse-100-keeps-dancing-just-below-its-all-time-high-2017-10-12).
EU officials are set to meet next week from Oct. 19-20, to
determine the way forward on Brexit discussions.
But multinationals suffer: A stronger pound tends to hurt shares
of multinational companies that make the bulk of their earnings
overseas.
Among those companies, consumer products heavyweight Unilever
PLC (ULVR.LN) fell 0.6%, as did drug maker GlaxoSmithKline PLC
(GSK.LN) . Luxury goods maker Burberry Group PLC (BRBY.LN) shed
0.9%.
Other stock movers: GKN PLC shares (GKN.LN) dropped 5.8%. The
engineering group said Friday its third-quarter margin performance
was lower than a year ago
(http://www.marketwatch.com/story/gkn-margins-squeezed-by-north-america-challenges-2017-10-13),
mainly because of operational challenges in its North American
aerospace division.
Advancers on the FTSE 100 included educational publisher Pearson
PLC (PSON.LN) and miner Rio Tinto PLC (RIO) (RIO) (RIO) , with
shares up 1.3% and 1.1%, respectively.
(END) Dow Jones Newswires
October 13, 2017 04:16 ET (08:16 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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