LONDON MARKETS: FTSE 100 Ends Slightly Higher As Investors Assess Trade Official's No-deal Brexit Remark
August 06 2018 - 12:25PM
Dow Jones News
By Victor Reklaitis, MarketWatch
Analyst: U.K.'s Liam Fox may just be talking tough, but traders
are selling the pound regardless
The U.K.'s main equity gauge finished slightly higher Monday,
getting a boost from the pound's drop after fresh Brexit
posturing.
Investors also assessed another dose of earnings reports.
How markets are performing
The FTSE 100 closed up by less than 0.1% to end at 7,663.78,
after jumping 1.1% in Friday's session
(http://www.marketwatch.com/story/ftse-100-jumps-friday-but-remains-on-track-for-weekly-loss-2018-08-03)
but still registering a weekly loss of 0.6%.
The British blue-chip gauge is showing a drop of 0.3% for the
year to date.
The pound was buying $1.2946, down from $1.3002 late Friday in
New York, having fallen to levels last seen 11 months ago
(http://www.marketwatch.com/story/british-pound-at-11-month-low-versus-dollar-as-brexit-fears-flare-up-2018-08-06).
What's moving markets
Liam Fox, the U.K.'s international trade secretary, said in a
Sunday Times interview
(https://www.thetimes.co.uk/edition/news/liam-fox-says-there-is-a-6040-chance-of-no-dealbrexit-lpsgm2gdf)
over the weekend that there is a 60% chance that the country will
crash out of the European Union without a deal with the bloc.
Brexit-related worries tend to weigh on the pound, and so
sterling lost ground Monday. The British currency was down about
1.3% against the dollar in August, and it remains far below the
$1.50 level that it was trading at before the June 2016 vote in
favor of leaving the EU.
A softer pound can boost the FTSE 100, as the index's
multinational companies generate most of their sales in other
currencies.
Don't miss:A top London startup's CEO flags the biggest Brexit
threat to his industry
(http://www.marketwatch.com/story/a-top-london-startups-ceo-flags-the-biggest-brexit-threat-to-his-industry-2018-08-06)
Worries about global trade tensions remained part of the
investing backdrop, after U.S. President Donald Trump over the
weekend tweeted that American tariffs are "working far better than
anyone ever anticipated
(https://twitter.com/realDonaldTrump/status/1025830647649247232)."
That came after China on Friday threatened
(http://www.marketwatch.com/story/china-threatens-new-tariffs-on-60-billion-of-us-products-2018-08-03)
to slap tariffs on $60 billion of American goods if the White House
goes ahead with its plans to impose new levies on Chinese
products.
Meanwhile, China's Global Times newspaper said Beijing is ready
to dig in for a "protracted war"
(http://www.marketwatch.com/story/us-has-lost-its-mind-over-trade-beijing-ready-for-long-fight-chinese-newspaper-2018-08-06)
with the U.S. over trade. Equity strategists have warned that the
escalating trade fight could weigh on global economic growth.
What are strategists saying?
"At the weekend, Liam Fox, the secretary for international
trade, revealed the possibility of the U.K. leaving the EU without
a trade deal is 60-40," said David Madden, an analyst at CMC
Markets UK, in a note.
"Mr. Fox might have been taking a tough line in a bid to gain
leverage over the EU negotiators, but traders aren't taking any
chances and have been selling sterling."
Stocks in focus
Shares in Just Eat PLC(JE.LN)ended the session down 1.5% for one
of the FTSE 100's biggest drops after the food-delivery company
posted first-half results. It was a bittersweet period, as the
company delivered a profit fall but raised 2018 revenue guidance, a
Dow Jones Newswires report said.
Shares in HSBC Holdings PLC(HSBA.LN)(HSBA.LN)dropped 1% after
the bank said adjusted profit before tax fell
(http://www.marketwatch.com/story/hsbc-profit-gets-a-lift-from-retail-banking-2018-08-06).
Tesco PLC's stock (TSCO.LN)(TSCO.LN)edged down by less than
0.1%, giving up an early gain. The British grocery chain and French
peer Carrefour SA (CA.FR) confirmed they have entered into a
long-term strategic alliance
(http://www.marketwatch.com/story/tesco-carrefour-confirm-strategic-alliance-2018-08-06),
as they hope to use their buying power with suppliers to cut
prices.
(END) Dow Jones Newswires
August 06, 2018 12:10 ET (16:10 GMT)
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