Pound Dips as Brexit Talks Hit a Roadblock

Date : 10/17/2019 @ 9:46AM
Source : Dow Jones News

Pound Dips as Brexit Talks Hit a Roadblock

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)

Copyright (c) 2019 Dow Jones & Company, Inc.


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