LONDON MARKETS: FTSE 100 Falls As Pound Rallies On Jump In Retail Sales
March 23 2017 - 7:36AM
Dow Jones News
By Sara Sjolin, MarketWatch
Investors are still digesting Wednesday's attack in London
U.K. stocks moved lower on Thursday, weighed by a rally in the
pound after retail sales beat expectations and calmed fears about
rising inflation.
Investors were also still digesting the attack in London on
Wednesday afternoon, which left at least four people dead and
dozens injured. Police is treating the incident as a terrorist
attack.
The FTSE 100 index was flat at 7,324.52, on track for a third
straight day of losses.
The weakness came as the pound rose to an intraday high of
$1.2528 after U.K. retail sales for February rose 1.4%
(http://www.marketwatch.com/story/uk-retail-sales-surge-14-in-february-2017-03-23),
easily beating forecasts of 0.4%. Sterling traded at $1.2484 late
Wednesday in New York. A stronger pound tends to weigh on the many
FTSE 100 companies that make the bulk of their revenue overseas and
then transfer their profit back to the U.K.
"The risks to real household spending from rising inflation are
grossly overstated," said Kallum Pickering, senior U.K. economist
at Berenberg, in a response to the retail sales.
"The rise in inflation will squeeze household incomes in 2017
and 2018 even as tight labor market conditions cause a modest rise
in nominal wage growth. But it is unlikely to fully pass through
into real consumption growth," he added.
Shares of Reckitt Benckiser Group PLC (RB.LN) fell 1.1%,
Unilever PLC (ULVR.LN) (ULVR.LN) lost 0.8% and British American
Tobacco PLC (BATS.LN) (BATS.LN) dropped 0.8%.
The heavily-weighed energy giants were also declining, following
news on Wednesday that U.S. oil supplies have risen to a fresh
record. Shares of BP PLC (BP.LN) (BP.LN) lost 0.4% and Royal Dutch
Shell PLC (RDSB.LN) (RDSB.LN) fell 0.3%. Oil prices closed lower on
Wednesday, but rebounded slightly in Thursday's trade.
In other movers, shares of Kingfisher PLC (KGF.LN) dropped 1.5%,
building on a 5.1% slide from Wednesday when the home-improvement
retailer flagged concerns about the uncertainty for the U.K.
economy in the wake of the Brexit vote
(http://www.marketwatch.com/story/kingfisher-profit-rises-chairman-to-retire-2017-03-22).
Next PLC (NXT.LN) jumped 6.4% after the fashion retailer
maintained its final dividend at GBP1.05 and confirmed its guidance
for the current year
(http://www.marketwatch.com/story/fashion-retailer-next-posts-drop-in-profit-2017-03-23).
London attack: Eight people have been arrested
(http://www.marketwatch.com/story/seven-arrested-in-six-raids-as-police-probe-london-terror-attack-2017-03-23)
as police continue to investigate the attack in London on
Wednesday.
An assailant on Wednesday afternoon mowed down pedestrians on
Westminster Bridge, before breaking through barriers and into
parameters of the Houses of Parliament. A police officer was
stabbed and later died of his injuries. Two members of the public
and the attacker have also been confirmed dead.
(END) Dow Jones Newswires
March 23, 2017 07:21 ET (11:21 GMT)
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