LONDON MARKETS: FTSE 100 Spooked By India-Pakistan Tensions, Held Back By Strong Pound
February 27 2019 - 8:59AM
Dow Jones News
By Emily Horton
London markets fell on Wednesday, as a strong pound continued to
weigh on the FTSE 100, with tensions between India and Pakistan
also spooking some investors.
How are markets performing?
The FTSE 100 fell 0.7% to 7,097.77, while the pound strengthened
further on growing sentiment a delay to the March 29 Brexit
deadline will happen.
What's driving the markets?
Prime Minister Theresa May said Tuesday that if her deal gets
rejected in a March 12 vote, lawmakers can vote to delay the
process. Discussions will carry on Wednesday.
Read:Brexit Brief: Pro-Europe rebels mount another push to take
control
(http://www.marketwatch.com/story/brexit-brief-pro-europe-rebels-mount-another-push-to-take-control-2019-02-27)
The pound fetched $1.3271 from $1.1390 late in New York on
Tuesday. Since many U.K. stocks earn substantial revenues outside
the country, strength in the U.K. currency can hurt the heavyweight
exporters.
Plus:British pound keeps gaining amid Brexit hopes as currency
markets play themes on loop
(http://www.marketwatch.com/story/british-pound-keeps-gaining-amid-brexit-hopes-as-currency-markets-play-themes-on-loop-2019-02-27)
What's driving the markets?
Growing geopolitical tension between Pakistan and India
(http://www.marketwatch.com/story/indian-fighter-jets-reportedly-shot-down-by-pakistan-as-regional-tensions-heat-up-2019-02-27)
weighed on impacted equities across Europe and parts of Asia, with
London being hit especially hard "where benchmarks are breaking
significant support levels," Pierre Veyret, technical analyst at
ActivTrades, in a note to clients. He said the next big support
level for the FTSE 100 lies at 7,010.
Elsewhere, the second summit between President Donald Trump and
North Korean leader Kim Jong Un is set to kick off in Vietnam on
Wednesday
(http://www.marketwatch.com/story/trump-meets-with-n-korean-dictator-kim-jong-un-for-historic-second-summit-as-analysts-raise-doubts-2019-02-27).
The two leaders will discuss the denuclearization agreement initial
signed in at the first summit in June 2018.
What stocks are active?
Leading the decliners, supermarket Marks & Spencer Group PLC
(MKS.LN) lost over 10%, after it announced a new joint venture
(http://www.marketwatch.com/story/marks-spencer-ocado-form-new-joint-venture-2019-02-27)
with online delivery service Ocado Group PLC (OCDO.LN), which added
3.5%.
"This deal is a case of the old meeting the new. M&S has
clearly decided if you can't beat them, join them, and in a digital
age it simply can't afford to ignore the online audience for food,"
Laith Khalaf, senior analyst at Hargreaves Lansdown, told clients
in a note.
Although ITV PLC (ITV.LN) announced a profit rise
(http://www.marketwatch.com/story/itv-pretax-profit-rises-sees-weak-ad-market-ahead-2019-02-27),
the television channel lost 2.7% as revenue growth was offset by
the cost increases in its broadcast and online division.
"While the strategy makes sense, and ITV is impressively growing
its share of viewing, there's no getting away from the fact the
world is changing fast and the group's core business is facing a
battle to stay relevant. That's a significant challenge" Khalaf
also said.
Meanwhile, leading the heavyweight miners Rio Tinto PLC (RIO.LN)
gained 0.6%, after saying it will pay a special dividend as profits
jumps
(http://www.marketwatch.com/story/rio-tinto-to-pay-special-dividend-as-profit-jumps-2019-02-27).
In sympathy, Glencore PLC(GLEN.LN) also rose 1%.
(END) Dow Jones Newswires
February 27, 2019 08:44 ET (13:44 GMT)
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