LONDON MARKETS: FTSE 100 Adds To Recent Retreat As Central Banks Look Set To Tighten
March 19 2018 - 5:36AM
Dow Jones News
By Victor Reklaitis, MarketWatch
Micro Focus shares plunge as CEO exits; Hammerson's stock soars
after takeover offer
U.K. blue-chip stocks lost ground Monday, adding to the prior
week's drop, with analysts pinning the retreat in part on
expectations that the Bank of England and the U.S. Federal Reserve
will signal this week how their monetary policies may be
tightening.
Micro Focus International PLC's stock was the FTSE 100's biggest
loser as the software maker warned on its outlook and said its CEO
has resigned.
How markets are moving
The FTSE 100 index fell 1% to 7,089.80. The British benchmark
gave up 0.8% last week, pulling back from a potentially deeper
weekly loss by gaining modestly on Thursday and Friday.
The pound bought $1.3951, up from $1.3944 late Friday in New
York.
What's driving markets
Investors have been worrying this month about a potential global
trade war, and central banks have the attention of markets as well.
A BOE monetary policy decision is expected on Thursday after a U.S.
Fed decision on Wednesday.
The trade concerns come as the Trump administration takes a
hawkish stance on U.S. trade with China and moves ahead with
tariffs on foreign steel and aluminum.
The progress of the Brexit talks is also in focus, ahead of the
EU leaders' summit on Thursday and Friday, which investors will be
watching for signs of a transition deal.
What strategists are saying
"While investors remain concerned about tensions between the
U.S. and the rest of the world over trade, it's also set to be an
important week for the U.S. and U.K. economies, with the U.S.
central bank set to pull the trigger on another rate increase this
week at a time when some early concerns about rising inflation have
subsided to a certain extent," said Michael Hewson, chief market
analyst at CMC Markets UK, in a note.
"The U.K. is facing an important week, and while no changes in
monetary policy are expected on Thursday, the latest inflation
numbers, due tomorrow, along with wages on Wednesday, are expected
to point to a narrowing gap between the two which could be
supportive of a possible tightening of interest-rate policy in the
coming months," Hewson added.
Read:Pound could surge in 'frenetic' week of Brexit and BOE
news, ING says
(http://www.marketwatch.com/story/pound-could-surge-in-frenetic-week-of-brexit-and-boe-news-ing-says-2018-03-16)
Stock movers
Micro Focus shares (MCRO.LN) dived 51% after the company said
CEO Chris Hsu has resigned and warned that revenue for fiscal 2018
will fall more than previously anticipated.
On the upside, Hammerson PLC shares (HMSO.LN) soared 26% for the
FTSE 100's biggest gain. The move came after the mall owner drew
and rejected a 4.9 billion-pound takeover offer
(http://www.marketwatch.com/story/klepierre-makes-49-bln-hammerson-takeover-step-2018-03-19)
from French real-estate investment company Klepierre SA (LI.FR) ,
whose shares were down 4%.
Melrose Industries PLC (MRO.LN) on Monday lowered the acceptance
condition for its hostile 8.1 billion-pound ($11.3 billion) offer
for GKN PLC (GKN.LN) , meaning it is lowering the barrier to the
success of its takeover bid. In addition, Melrose said it will pay
up to GBP1 billion into GKN's pension scheme
(http://www.marketwatch.com/story/melrose-to-put-1-billion-into-gkn-pension-fund-2018-03-19)
over the period of ownership. Shares of GKN were up 0.8%, while
shares of Melrose dropped 1%.
(END) Dow Jones Newswires
March 19, 2018 05:21 ET (09:21 GMT)
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