LONDON MARKETS: U.K.'s FTSE 100 Ends Lower After Three-day Advance
23 Novembre 2017 - 06:14PM
Dow Jones News
By Victor Reklaitis and Carla Mozee, MarketWatch
British Gas parent logs worst session on record; think tank
warns on U.K. wages
British blue-chip stocks ended slightly in the red on Thursday,
following a three-day move higher. The London benchmark was led
down by a double-digit plunge in shares of British Gas parent
Centrica PLC after a disappointing financial update.
Traders continued to ponder the Autumn Budget presented
Wednesday by Chancellor of the Exchequer Philip Hammond, which
included downgrades to the government's forecasts for U.K. economic
growth
(http://www.marketwatch.com/story/ftse-100-on-course-for-3rd-straight-gain-with-uk-budget-on-deck-2017-11-22).
How markets fared: The FTSE 100 index ended down 1.8 point at
7,417.24, but finished off session lows. The financial and
utilities sectors closed lower, but tech and consumer goods stocks
led advancers.
The London benchmark had risen 0.5% over the previous three
sessions to an almost two-week high
(http://www.marketwatch.com/story/ftse-100-edges-lower-as-brexit-hopes-buoy-pound-2017-11-21).
The gauge is up 3.8% for the year, lagging the Stoxx Europe 600's
rise of 7.1% and the U.S. S&P 500's rally of 16%.
The pound changed hands at $1.3301, down from $1.3324 late
Wednesday in New York. The currency is up about 0.6% for the week,
stretching its year-to-date gain to nearly 8%. It remains well
below the $1.50 level that it hit just before the U.K.'s June 2016
vote to leave the European Union, or Brexit.
See:How German political turmoil could hurt the pound more than
the euro
(http://www.marketwatch.com/story/heres-why-german-political-turmoil-could-hurt-sterling-more-than-the-euro-2017-11-21)
The pound fell to an intraday low of $1.3285 after the release
of the U.K. gross domestic product report for the third quarter.
The British economy expanded 0.4% quarter-over-quarter, and by 1.5%
year-over-year, the Office for National Statistics said. Those
figures matched expectations.
What strategists are saying: "Although on the face of it, the
downgrade to the U.K. growth forecasts and the weak productivity
theoretically should be bad news for sterling, the market is most
likely pricing out the probability of a collapse in the
government," said Kathleen Brooks, research director at City Index,
in a note.
"Hammond's generally well-received performance is the first
solid piece of good news for [Prime Minister] Theresa May after a
torrid month," she added.
Resignations by key cabinet ministers and a threatened rebellion
from within her party's own ranks were only two of the factors
putting pressure on U.K. leader May and her government
(http://www.marketwatch.com/story/how-an-unsent-letter-to-theresa-may-is-driving-the-pound-lower-2017-11-13)
this month.
Stock movers: Centrica shares (CNA.LN) sank 15.5%, their worst
session on record, for the FTSE 100's biggest drop. The utility
company warned Thursday that its energy supply businesses have had
a disappointing second half
(http://www.marketwatch.com/story/centrica-says-on-track-to-hit-2017-targets-2017-11-23)
and gave a full-year adjusted earnings outlook that was below the
market consensus.
Severn Trent PLC shares (SVT.LN) rose 0.6% after the water
company reported a slight rise in interim profit before tax and
raised its dividend
(http://www.marketwatch.com/story/severn-trent-profit-rises-on-increased-turnover-2017-11-23).
The Autumn Budget out yesterday whacked home-builder shares, as
it included plans to move toward taking land from developers who
fail to build houses. Those stocks recovered some ground
Thursday.
Barratt Developments PLC (BDEV.LN) picked up 1.8%, Berkeley
Group Holdings PLC (BKG.LN) gained 2%, and Persimmon PLC (PSN.LN)
added 1%.
Other developments: The Institute for Fiscal Studies on Thursday
said the outlook for wages for Britons is looks bleak after the
government cut its forecasts for productivity and economic
activity.
"Average earnings look like they will be nearly GBP1,400 a year
lower than forecast [in March 2016], still below their 2008 level.
We are in danger of losing not just one but getting on for two
decades of earnings growth," the think tank's director Paul Johnson
wrote in an assessment of the Autumn Budget.
(END) Dow Jones Newswires
November 23, 2017 11:59 ET (16:59 GMT)
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