LONDON MARKETS: U.K.'s FTSE 100 Falls As Turkey Worries Hit Travel Industry's Stocks
August 13 2018 - 7:05AM
Dow Jones News
By Victor Reklaitis, MarketWatch
TUI, easyJet shares lose ground
The U.K.'s main stock index pulled back Monday, joining in a
global selloff that was blamed on worries about Turkey's precarious
financial condition.
Travel-related shares with exposure to Turkey were among the big
decliners.
How markets are performing
The FTSE 100 fell 0.6% to 7,624.33, after tumbling 1% on Friday
(http://www.marketwatch.com/story/ftse-100-pulled-down-as-turkey-contagion-concerns-grow-2018-08-10)
as concerns over Turkey escalated.
The British blue-chip gauge is showing a drop of 0.8% for the
year to date.
The pound was buying $1.2748, down slightly from $1.2771 late
Friday in New York.
What's moving markets
Stocks in the U.K. and the rest of Europe have been selling off
on fears about potential contagion from Turkey's problems,
especially in the banking sector.
The country's central bank on Monday made policy moves
(http://www.marketwatch.com/story/turkeys-central-bank-fails-to-soothe-investors-2018-08-13)
that failed to alleviate concerns among investors. It pledged to
provide "all the liquidity the banks need" in a statement. It also
said banks would be able to borrow foreign-exchange deposits from
the central bank at a one-month maturity and one-week
maturities.
Analysts said Turkey's reluctance to raise interest rates stood
out.
See:Turkish lira hits fresh low as Erdogan's currency crisis
echoes through markets
(http://www.marketwatch.com/story/turkish-lira-hits-fresh-low-as-erdogans-currency-crisis-echoes-through-stock-markets-2018-08-12)
What are strategists saying?
"The central bank has said it will take 'all necessary measures'
to ensure financial stability and will take steps to ensure
liquidity is provided. But in stopping short of actually raising
rates, we must question if the central bank has the arsenal to
combat this currency rout and avoid a financial crisis in Turkey,"
said Neil Wilson, chief market analyst for Markets.com, in a
note.
"As well as banks, we note that travel and tourism stocks with
exposure to Turkey, like Thomas Cook, TUI and easyJet, were among
the heavier fallers today," Wilson added.
Stocks in focus
Shares in TUI AG and easyJet PLC (EZJ.LN)were down by 2.9% and
1.1%, respectively.
Over on the mid-cap FTSE 250, Thomas Cook Group PLC's stock
(TCG.LN)fell 2.5%.
Shares in Paddy Power Betfair PLC dropped 2.8% after the
gambling company was downgraded to sell from neutral by Citigroup
analysts, who reportedly cited factors such as disappointment with
its online business and its Australian unit.
(END) Dow Jones Newswires
August 13, 2018 06:50 ET (10:50 GMT)
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