LONDON MARKETS: FTSE 100 Pares Gain As Trump Backtracks On Brexit Criticism
13 Juillet 2018 - 06:33PM
Dow Jones News
By Carla Mozee and Sara Sjolin, MarketWatch
U.K. blue-chip stocks break run of weekly losses
U.K. stocks pared their gains into the close on Friday as the
pound swung higher after U.S. President Donald Trump backtracked on
his criticism of Theresa May's Brexit plans and said a U.S.-U.K.
trade deal is still possible.
The pound had traded sharply lower earlier in the day after a
bombshell interview with Trump in the Sun newspaper in which the
U.S. president said May's Brexit strategy may "kill" Britain's
chances of a trade deal with the world's largest economy.
How markets are moving
The FTSE 100 index rose 0.1% to close at 7,661.87, after trading
as high as 7,716.24 earlier in the day. For the week, the London
benchmark ended 0.6% higher, breaking a two-week losing run.
The pound traded at $1.3215, up from $1.3206 late Tuesday in New
York. Sterling fell to as low as $1.3102 following the Sun
interview.
What's driving the market?
U.K. stocks had opened with firm gains, largely supported by a
sharp fall in the pound after Trump, in an interview with The Sun
(https://www.thesun.co.uk/news/6766531/trump-may-brexit-us-deal-off/)
newspaper published late Thursday, said U.K. Prime Minister Theresa
May's plan for a so-called soft Brexit would damage the likelihood
of a trade deal between Britain and the U.S.
Sterling weakness can bolster revenue made overseas by
multinational companies, which are heavily weighted on the FTSE
100.
"If they do a deal like that, we would be dealing with the
European Union instead of dealing with the U.K., so it will
probably kill the deal," said Trump, whose comments were published
as May hosted a formal dinner for Trump on Thursday night.
The U.S. president, however, on Friday backtracked his criticism
of May, saying at a joint press conference that he still supports a
post-Brexit trade deal with the U.K.
May's government on Thursday published a 120-page report that
provided further details on the vision for the U.K.'s future
relationship with the European Union, which was agreed at a Cabinet
meeting last week. The strategy calls for frictionless trade in
goods between the U.K. and the EU, prompting critics to say that
wouldn't amount to a clean break by the U.K. from the bloc.
(https://twitter.com/elliotwagland/status/1017683947164258304)
Check out:U.K. government rules out push for 'mutual
recognition' of financial services regulations
(http://www.marketwatch.com/story/uk-government-dashes-london-financial-centers-hopes-for-all-access-brexit-deal-2018-07-12)
What strategists are saying?
Friday's gain "seems like satisfactory conclusion to five days
of political tension and upheaval. In the U.K. the Prime Minister
remains in place, and, far from enduring a deeply embarrassing
press conference with President Trump, has actually come away with
a reiteration of the importance of the Special Relationship (always
a big point for any U.K. leader) and some choice quotes about
Brexit that she will no doubt use in the chamber next week to good
effect," said Chris Beauchamp, chief market analyst at IG, in a
note.
"Even sterling has managed to rally, pushing off the lows of the
week at the sight of an outbreak of U.K./U.S. unity that will play
well among all but the most disaffected of the Tory party. Stock
markets continue to enjoy the period of calm that has followed the
apparent intensification of trade wars earlier this week, and, for
the time being, it looks like the latest dip in equities has been
bought once again," he added.
Stock movers
DCC PLC (DCC.LN) rose 3.7% after the support-services group
backed its outlook for fiscal 2019
(http://www.marketwatch.com/story/dcc-buys-2-businesses-backs-profit-growth-outlook-2018-07-13)
and said it acquired two businesses for a combined value of GBP110
million ($145 million).
Diageo PLC (DEO) (DEO) ended up 0.7% after a ratings upgrade at
Goldman Sachs to buy from neutral of the liquor maker, whose brands
include Johnnie Walker and Baileys.
Ashmore Group PLC shares (ASHM.LN) rose 0.9% even as the
investment manager said its assets under management fell by $2.6
billion in the second quarter as net inflows were offset by an
investment loss
(http://www.marketwatch.com/story/ashmore-takes-52-bln-investment-loss-hit-2018-07-13).
(END) Dow Jones Newswires
July 13, 2018 12:18 ET (16:18 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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