LONDON MARKETS: FTSE 100 Driven Lower By Plunge In Shares Of TUI AG
August 09 2018 - 7:05AM
Dow Jones News
By Barbara Kollmeyer, MarketWatch
Travel firm TUI AG's shares are on pace to post worst day in 2
years
The U.K.'s main stock benchmark traded solidly lower on
Thursday, putting the FTSE 100 on the verge of snapping a four-day
streak that has driven it to a roughly 2 1/2 -year high, as a gain
in health-related companies AstraZeneca PLC and were more than
offset by a plunge in shares of TUI AG.
How markets are performing
The FTSE 100 fell 0.6% to 7,729.68, after it closed Wednesday up
0.8% and finished at its highest level since May 24
(http://www.marketwatch.com/story/ftse-100-on-track-for-4th-win-in-a-row-as-pound-weakens-to-one-year-low-2018-08-08).
What's moving markets
Thursday's downdraft for the FTSE appeared to be at least partly
underpinned by TUI AG's worst trading day since June 24, 2016,
according to FactSet data. Shares of the travel company were
slammed as it explained that a bout of blistering hot weather
throughout Europe hurt its bookings business. "Hot weather isn't
usually the right environment for last-minute bookings," TUI's CEO
Fritz Joussen said on a call to discuss the firm's quarterly
results.
Meanwhile, the British pound was up 0.1% to $1.2856 against the
dollar from 1.2882 late Wednesday. The threat of a no-deal Brexit
has loomed over the British currency, pushing sterling to a
12-month low
(http://www.marketwatch.com/story/british-pound-hits-one-year-low-trade-war-evident-in-china-data-2018-08-08)
a day ago and helping support a punch higher for the FTSE. For the
FTSE 100's multinational companies, a softer pound can be a boost
as most of their sales are generated in other currencies.
Global trade tensions hovered in the backdrop as China's
Ministry of Commerce released an updated list of items it would
target with tariffs if the U.S. were to impose its planned 25%
tariffs on an additional $16 billion of Chinese goods in
retaliation to the U.S.'s duties on now some $50 billion in Chinese
imports. Both tariff packages are set to be enacted near the end of
the month, which could ratchet up tariff tensions and fears about a
spillover into the broader economy.
Separately, the U.S. also unveiled a new series of sanctions on
Moscow over a nerve-agent attack on a former Russian spy and his
daughter in the U.K., which could elevate global anxieties.
What are strategists saying?
Michael Hewson, chief market analyst at CMC Markets, said that
"if the Trump administration follows through on its threat to
extend tariffs on to another $200bn worth of Chinese goods, while
concerns about new US sanctions on Russia may well also limit the
upside for European markets today,"
"For the time being markets appear to be putting to one side the
prospect of this happening in the near future which suggests that
for now we are probably in the foothills of a full blown trade
war.
"That doesn't change the fact that European markets have
underperformed their peers in the last few weeks and today's open
doesn't look like it will be any different, as we get another lower
open," he said.
Stocks in focus
GAINERS:
Shares of AstraZeneca PLC(AZN.LN) were up 2.34%, leading the
FTSE 100 gainers.
InterContinental Hotels Group PLC shares(IHG) rose by 2%.
LOSERS:
TUI AG led losers on the FTSE 100, down nearly 8%, representing
the worst one-day fall for the company since 2016.
CRH PLC's stock was down 1.7%, the second-worst performer on the
FTSE after TUI.
(END) Dow Jones Newswires
August 09, 2018 06:50 ET (10:50 GMT)
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