LONDON MARKETS: FTSE 100 Steps Higher, Pound Falls As Trump Criticizes 'soft Brexit' Plan
13 Juillet 2018 - 11:05AM
Dow Jones News
By Carla Mozee, MarketWatch
U.K. blue-chip stocks on track to break run of weekly losses
U.K. stocks climbed Friday, on track to finish higher for the
week, as the pound pulled back after U.S. President Donald Trump
said the U.K.'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 0.8% to 7,711.46, as all sectors gained
ground. The index on Thursday rose 0.8%
(http://www.marketwatch.com/story/uk-stocks-rise-as-traders-await-mays-brexit-blueprint-2018-07-12).
For the week, the London benchmark was looking at a 1.2% advance,
which would be the first win in three weeks.
The pound fell to $1.3138 from $1.3206 late Tuesday in New York.
Against the euro, the pound dropped to EUR1.1290 from
EUR1.1316.
What's driving the market?
Just a handful of stocks declined early Friday, with broad-based
gains largely supported by the fall in the pound. Sterling weakness
can bolster revenue made overseas by multinational companies, which
are heavily weighted on the FTSE 100.
The pound fell 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.
"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.
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)
On Friday, Trump is expected to hold a press conference. Recent
action on stock markets has been swayed by concerns about a trade
battle between the U.S. and China, so traders will likely listen
out for any comments on the matter. In the early going, investors
seemed to be putting aside trade-related fears, on signs the U.S.
and China are willing to resume high-level talks.
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
-- The FTSE 100 is "back in the ballpark of Monday and Tuesday's
three-and-a-half week highs, showing the extent to which investors
are trying to ignore the ongoing trade war between the U.S. and
China unless they specifically have a new threat to deal with,"
said Connor Campbell, financial analyst at Spreadex, in a note.
-- "As advertised, the [Brexit] plan seeks frictionless access
to the single market for goods, but not for services; it repeatedly
highlighted service firms would probably have less access to the EU
market than they do now. All in all, this plan is unlikely to be
accepted by the EU in its current form, which implies that further
negotiations (and potentially concessions) may lie ahead," said
Andreas Georgiou, investment analyst at XM.com, in a note.
Stock movers
DCC PLC (DCC.LN) rose 3.1% 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) was up 1.4% 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 2.8% 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).
Micro Focus International PLC (MCRO.LN) topped the FTSE 100 by
rising 5%. Among the index's few decliners, Royal Bank of Scotland
Group PLC (RBS.LN) fell 0.2%, as did oil major BP PLC (BP.LN)
(END) Dow Jones Newswires
July 13, 2018 04:50 ET (08:50 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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