Pound Dips as Brexit Talks Hit a Roadblock
October 17 2019 - 5:46AM
Dow Jones News
By Avantika Chilkoti
U.K. stocks and the British pound entered another day of
volatility as a crucial European Union summit kicks off in Brussels
without a Brexit deal in place.
The pound fell 0.4% on the dollar on Thursday after Prime
Minister Boris Johnson's proposals -- especially those regarding
how to avoid a physical border on the island of Ireland while still
reaching an accord on customs and taxes -- failed to get the
backing of Northern Irish allies in the U.K. parliament.
"If they do not support it, we would likely get either a
referendum or an election where the Conservative Party runs on the
platform of a pre-signed deal," analysts at Deutsche Bank wrote in
a note to clients.
The U.K.'s FTSE 250 index, a gauge that includes local companies
with significant domestic operations, dropped 0.5%. European
diplomats said a draft text had been completed and was in the U.K.
government's hands to decide whether to sign off on. If approved by
EU leaders, any agreement would still need to be ratified in the
U.K. and European parliaments.
Elsewhere, markets wavered. Futures tied to the Dow Jones
Industrial Average index and the Shanghai Composite benchmark were
almost flat.
The Stoxx Europe 600 index swung between gains and losses before
edging up 0.2%, with telecommunications companies leading the
gains.
Shares in Ericsson rallied 6.7% after the Swedish
telecom-equipment maker reported better-than-expected third-quarter
results and raised its sales target. Elisa Oyj, the Finnish
telecommunications group, rallied 5.8% after the company boosted
its earnings guidance.
WH Smith gained 4.7% after the U.K. retailer agreed to buy
Marshall Retail Group for $400 million.
Later in the day, investors will be watching for further signals
on the strength in the world's largest economy as the Federal
Reserve releases industrial production figures for September.
Economists forecast overall industrial output declined in
September, after rising 0.5% in August.
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com
(END) Dow Jones Newswires
October 17, 2019 05:31 ET (09:31 GMT)
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