Stocks Fall as Pound Regains Ground After Selloff

Stocks turned lower Friday ahead of the U.S. jobs report, while the British pound began to recover after briefly plunging over 6% in Asian trade.

The pound was last up 0.7% against the dollar at $1.2438 after falling to as low as $1.1819, its lowest level in over three decades, during Asian trading hours. The selloff began after French President Franç ois Hollande called for tough exit negotiations as Britain leaves the European Union. Market participants said the decline was accelerated by computerized trades at a time of low liquidity.

"It is still early days to determine the end-result but one thing seems certain: sterling will remain under severe pressure," said Vasileios Gkionakis, head of currency strategy at UniCredit Research.

London's export-heavy FTSE 100 index, which tends to move opposite to the British currency, rose 0.6% in the early minutes of trading, even as the pan-European Stoxx Europe 600 edged down 0.2%

The moves came on the heels of a mildly downbeat session in Asia as concerns over the U.K.'s access to the single market dampened sentiment. Japan's Nikkei Stock Average fell 0.2%, while shares in Hong Kong fell 0.6% and shares in Australia fell 0.3%.

Futures pointed to a 0.3% opening loss for the S&P 500, as investors looked ahead to the monthly U.S. jobs report due later in the day. U.S. government bond yields closed at a four month high on Thursday as investor expectations grew for a robust reading.

Write to Riva Gold at riva.gold@wsj.com and Saumya Vaishampayan at saumya.vaishampayan@wsj.com

(END) Dow Jones Newswires

October 07, 2016 03:55 ET (07:55 GMT)

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