LONDON MARKETS: FTSE 100 Rises, As Pound Falls On BOE Rate-hike Doubts
20 Avril 2018 - 10:48AM
Dow Jones News
By Carla Mozee, MarketWatch
Benchmark heads for 4th straight win; Shire falls as Allergan
rules out bid
U.K. stocks advanced Friday, aided by a drop in the pound's
value after Bank of England Governor Mark Carney suggested that an
interest-rate increase may not come next month as expected.
How markets are moving
The FTSE 100 index was up 0.4% to 7,354.50, led higher by the
financial group, while the health care sector was in the red. The
London benchmark on Thursday rose 0.2%
(http://www.marketwatch.com/story/uk-stocks-climb-to-10-week-high-as-metals-prices-soar-2018-04-19)
to close at its highest level since Feb. 5, according to FactSet
data. A win on Friday would be its fourth in a row.
For the week, the blue-chip stock gauge was on course to rise
1.2%, which would mark a fourth straight weekly advance.
The pound traded at $1.4055, down from $1.4082 late Thursday in
New York. Against the euro, sterling bought EUR1.1390, down from
EUR1.1408 in the prior session.
What's driving the markets
The pound was a major factor driving the FTSE 100's direction.
Sterling dropped below $1.41 late Thursday after Bank of England
Governor Mark Carney dampened expectations for an interest rate
rise next month.
In an interview with the BBC
(http://www.bbc.co.uk/news/business-43831159), Carney said a rate
hike is "likely" this year, but said he didn't "want to get too
focused on the precise timing," citing uncertainty over Brexit and
recent disappointing retail and inflation data. The market had been
pricing in a rate increase at the BOE's meeting on May 10.
A weaker pound can help lift the British blue-chip index, as its
multinational companies generate most of their sales in foreign
currencies.
What are strategists saying?
"It's being reported that the EU is set to reject Britain's
proposed solution to the Irish border conundrum, leaving U.K. Prime
Minister Theresa May between the rock of the EU and the hard place
of a compromise unacceptable to the 'Leave' faction in the U.K.,"
said Marshall Gittler, chief strategist at ACLS Global, in a
note.
"So the 'Goldilocks' scenario of rising interest rates and
falling Brexit tensions, which has pushed [the pound] up to its
post-Brexit high, is now collapsing, leaving GBP exposed," he
added.
Stocks in focus
Among multinationals, shares of drug maker GlaxoSmith Kline PLC
(GSK.LN) added 1.2%, and British American Tobacco PLC (BATS.LN)
picked up 1.8%.
Reckitt Benckiser Group PLC shares (RB.LN) dropped 4.8%.
First-quarter like-for-like sales growth at the consumer products
maker came in
(http://www.marketwatch.com/story/reckitt-benckiser-sales-rise-backs-yearly-view-2018-04-20)
at 2%, falling short of expectations for 2.6% growth.
Shire PLC (SHPG) (SHPG) shares fell 3.3% after Allergan PLC
(AGN) late Thursday said it doesn't plan to make a bid for the
Dublin-based drug maker
(http://www.marketwatch.com/story/blink-and-you-missed-it-allergan-doesnt-plan-to-make-a-shire-bid-2018-04-19).
Topping advancers, Mediclinic International PLC (MDC.LN) shares
rose 3%, and building materials supplier CRH PLC moved up 2.2%.
Barclays PLC (BCS) said British regulators have proposed fining
its Chief Executive Jes Staley
(http://www.marketwatch.com/story/barclays-ceo-jes-staley-fined-but-keeps-job-2018-04-20),
after an investigation into his attempt to identify a
whistleblower. But the bank said the CEO will keep his job. Shares
were up 0.5%.
(END) Dow Jones Newswires
April 20, 2018 04:33 ET (08:33 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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