LONDON MARKETS: FTSE 100 On Course For 3rd Straight Gain, With U.K. Budget On Deck
November 22 2017 - 4:46AM
Dow Jones News
By Carla Mozee, MarketWatch
Miners rise; Thomas Cook shares tumble on FTSE 250
British blue-chip stocks rose Wednesday, on course for a third
session of gains, as a fall in the U.S. dollar helped lift mining
shares.
Meanwhile, shares of house builders lost ground as investors
braced for the U.K. finance minister's presentation of the
government's Autumn Budget, which is expected to tackle affordable
housing.
What markets are doing: The FTSE 100 index rose 0.2% to
7,422.46, led by advances for the basic materials and financial
groups. But the tech, health care and consumer-related sectors were
in the red. On Tuesday, the London benchmark picked up 0.3%.
(http://www.marketwatch.com/story/ftse-100-edges-lower-as-brexit-hopes-buoy-pound-2017-11-21)
The pound traded at $1.3252, up from $1.3237 late Tuesday in New
York.
See:How German political turmoil could hurt the pound more than
the euro
(http://www.marketwatch.com/story/heres-why-german-political-turmoil-could-hurt-sterling-more-than-the-euro-2017-11-21)
What's moving markets: The Conservative-led government will
present its first budget -- its spending and taxation plans --
since the U.K.'s snap election in June. As the Conservatives don't
have a parliamentary majority on their own, Chancellor of the
Exchequer Philip Hammond is seen as having little room to
maneuver.
Hopes rose that the stalled Brexit talks may regain momentum
after the Financial Times reported
(https://www.ft.com/content/525c4bd8-cede-11e7-9dbb-291a884dd8c6)
that the U.K. and the European Union are looking to agree on a
"divorce bill" -- the amount the U.K. will have to pay on
withdrawing from the bloc -- within three weeks.
U.K. budget: The chancellor is expected to reveal plans to
address a shortage of affordable housing in the U.K. Likely
measures include a reduction in stamp duty -- levied when a house
is bought -- for first-time buyers and a GBP10 billion boost to the
government's Help to Buy program.
Read:5 things to watch for in the U.K. budget
(http://www.marketwatch.com/story/5-things-to-watch-for-in-uk-budget-2017-11-22)
Home builder stocks were in focus in the runup to the tax and
spending announcement. Persimmon PLC (BKG.LN) and Barratt
Developments PLC (BDEV.LN) each fell 0.7%, while Taylor Wimpey PLC
(TW.LN) lost 0.5%.
Hammond is scheduled to present the Autumn Budget in parliament
at around 12:30 p.m. London time, or 7:30 a.m. Eastern Time.
What strategists are saying: "The Chancellor's plans will
undoubtedly be dictated by the fact that the Office for Budget
Responsibility will have to downgrade its outlook for the U.K.
economy from the figures we saw in March, where it estimated that
the U.K. economy would see 2% GDP growth this year. This is likely
to see a downgrade to about 1.5%," said Michael Hewson, chief
market analyst at CMC Markets, in a note.
"Against that backdrop and calls for greater investment in
public services, the Chancellor will have to navigate a tricky path
in maintaining the confidence of markets that the government will
still seek to do what is responsible, against the need to support
the economy," he said.
Miners on the up: Mining shares rose as dollar-denominated
metals prices gained "amid [dollar] weakness (U.S. holiday, dovish
Yellen, tax delays), Indonesian mine-supply disruptions and hopes
that Chinese output cuts will be less than expected," said Accendo
Markets analysts.
Among miners, Fresnillo PLC (FRES.LN) added 2.1%, Randgold
Resources PLC (RRS.LN) moved up 1%, and BHP Billiton PLC (BLT.LN)
(BHP.AU) (BHP.AU) tacked on 0.8%.
Stock movers: TUI AG fell 3.5%, with the travel services company
tracking a 12% plunge in shares of rival Thomas Cook Group PLC
(TCG.LN) on the mid-cap FTSE 250 .
Thomas Cook said in its full-year 2017 earnings report that
gross margin was reduced in part because of a competitive market in
Spain. The company's fiscal pretax profit rose to GBP46 million.
(http://www.marketwatch.com/story/thomas-cook-fy-profit-rises-hikes-dividend-by-20-2017-11-22)
Sage Group PLC (SGE.LN) fell 1.1% even as business software
company said pretax profit rose 41%
(http://www.marketwatch.com/story/sage-pretax-profit-up-41-raises-final-dividend-2017-11-22)
and that it's raising its final dividend. Sage shares have risen
about 17% this year.
(END) Dow Jones Newswires
November 22, 2017 04:31 ET (09:31 GMT)
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