LONDON MARKETS: FTSE 100 Closes Lower As TUI Sinks, Offsets Fresnillo's Gain
August 09 2018 - 1:35PM
Dow Jones News
By Barbara Kollmeyer, MarketWatch , Anneken Tappe
Travel firm TUI AG's shares did pare an earlier 8% tumble in
late trade
The U.K.'s main stock benchmark finished the session lower on
Thursday, ending a four-day winning streak for the FTSE 100, as
gains in health-related AstraZeneca PLC and metals producer
Fresnillo PLC were more than offset by a plunge in shares of travel
stock TUI AG.
How markets are performing
The FTSE 100 fell 0.5%, or 34.88 points, to 7,741.77 on
Thursday, retracing Wednesday's higher finish that left the index
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 , which despite reducing its earlier tumble
closed down 2.5%. 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 continued its slide as the U.S.
dollar gained strength and last bought $1.2846 compared with
$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. is also getting ready for a new series of
sanctions against Moscow
(http://www.marketwatch.com/story/russian-ruble-drops-to-21-month-low-as-further-sanctions-spell-trouble-2018-08-08)
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," he said.
"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," Hewson said.
Stocks in focus
GAINERS:
Fresnillo PLC shares (FRES.LN) powered advancers on the U.K.
benchmark, and ended the day 3.3% higher, as gold prices got a
slight lift higher on Thursday.
Cineworld Group PLC(CINE.LN) shares were among the top gainers
in London, climbing over 10% after posting upbeat profit and
revenue, with those results lifted by its acquisition of U.S.-based
Regal Entertainment Group.
Shares of AstraZeneca PLC(AZN.LN) ended up 2.6%. Along with
Fresnillo, AstraZeneca led the FTSE 100 gainers of the session.
InterContinental Hotels Group PLC shares(IHG) rose by 1.9%.
LOSERS:
TUI AG led early losers on the FTSE 100, down nearly 8%,
representing the worst one-day fall for the company since 2016.
However, shares were most recently down 2.5%.
CRH PLC's stock also dropped 2.5%, the second-worst performer on
the FTSE after TUI.
(END) Dow Jones Newswires
August 09, 2018 13:20 ET (17:20 GMT)
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