LONDON MARKETS: FTSE 100 Advances After Revival Of U.S. Tax-hopes
December 18 2017 - 5:29AM
Dow Jones News
By Carla Mozee, MarketWatch
U.K. blue-chip stocks rose Monday, riding up alongside U.S.
stock futures as investors prepared for the possibility a tax
overhaul will be passed by lawmakers in the U.S. this week.
But the benchmark FTSE 100 pared gains in part as the pound
gained against the dollar.
What markets are doing: The FTSE 100 index was up 0.3% at
7,513.59, with but the oil and gas sector moving higher. The
industrials, tech and basic materials sectors gained the most. On
Friday, the London benchmark rose 0.6%
(http://www.marketwatch.com/story/ftse-100-struggles-for-3rd-day-as-banks-fall-but-on-course-for-weekly-advance-2017-12-15)
and last week logged a rise of 1.3%.
The pound bought $1.3358, up from $1.3322 late Friday in New
York. Against the euro, sterling traded hands at EUR1.1328 versus
EUR1.1340 on Friday.
The 10-year gilt yield fell 1 basis point to 1.14%, according to
Tradeweb. Yields fall when prices rise.
What's moving markets: "Hopes that the U.S. tax reform bill is
clearing the final stages of Congress have helped boost stock
markets around the world. The FTSE took the lead from Asia
overnight and has started the penultimate trading week of the year,
on the front foot," said Fiona Cincotta, senior market analyst, at
City Index, in a note.
Gains in Asia and throughout Europe were followed up by advances
in U.S. stock futures. Futures for the Dow Jones Industrial Average
surged more than 100 points and indicated equity benchmarks are on
track for fresh record highs
(http://www.marketwatch.com/story/dow-sp-500-ready-to-power-to-new-records-on-fresh-tax-plan-optimism-2017-12-18).
The moves came after Treasury Secretary Steven Mnuchin on Sunday
said he has "no doubt"
(http://www.marketwatch.com/story/mnuchin-says-no-doubt-congress-will-pass-tax-bill-this-week-2017-12-17)
that Republican-led tax bill will be passed by lawmakers and make
it to President Donald Trump's desk this week to be signed into
law. The renewed optimism comes after two holdouts, Sens. Bob
Corker of Tennessee and Marco Rubio of Florida, pledged their
support for the tax proposals.
Read:Here's what's in the Republican tax deal
(http://www.marketwatch.com/story/heres-whats-in-the-republican-tax-deal-2017-12-13)
Still, there's a slim 52-48 majority for Republicans in the
Senate. Sen. John McCain of Arizona, who's battling a brain tumor,
is expected to miss the vote
(http://www.marketwatch.com/story/sen-john-mccain-wont-vote-on-republican-tax-bill-report-2017-12-17)
as he's returning to his home state.
"Whilst the U.S. futures are charging higher, the pockets of
concerns are showing through in the U.S. dollar, which is trading
weaker across the board in the early part of Monday," said
Cincotta.
The pound strengthened against the U.S. dollar which helped pare
gains for the FTSE 100. Pound strength can hurt the FTSE 100 as
about 75% of revenues for the index's components is made
overseas.
Back in London, U.K. Prime Minister Theresa May is scheduled to
meet with lawmakers to discuss what's next for the Brexit process
after EU leaders on Friday agree to move forward to the second
phase of talks. May, in a column for the Sunday Telegraph
(http://www.telegraph.co.uk/news/2017/12/16/getting-job-brexit-will-not-derailed/),
said the government "we will not be derailed from this fundamental
duty to deliver the democratic will of the British people."
Stock movers: Bank stocks worldwide have been among big
beneficiaries from prospects of tax cuts and reforms in the U.S.
But in London Monday, bank stocks were mixed. HSBC Holdings PLC
(HSBA.LN) (HSBA.LN) was up 0.3% and Barclays PLC (BCS) (BCS) rose
0.5%, but Royal Bank of Scotland Group PLC (RBS.LN) (RBS.LN) was
off 0.5%.
Weighing on the FTSE were oil and gas shares, with BP PLC
(BP.LN) (BP.LN) down 0.1% and Royal Dutch Shell PLC (RDSB.LN)
(RDSB.LN) off 0.3% even as Brent crude futures and crude oil
futures were up roughly 1%.
Mondi PLC (MND.JO) rose 2.2% after Deutsche Bank raised its
rating to buy from hold on the paper and packaging company.
Off the FTSE 100, shares of IG Group Holdings PLC (IGG.LN)
tumbled 11% after flagging concerns over the European Securities
and Markets Authority's tighter-than-expected clampdown on the
sector.
(END) Dow Jones Newswires
December 18, 2017 05:14 ET (10:14 GMT)
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