LONDON MARKETS: FTSE 100 Falls As Talk Of Brexit Delay Rallies Pound
12 January 2019 - 1:03AM
Dow Jones News
By Emily Horton
Report says delay to March 29 deadline increasingly likely
London's main equity benchmark slipped into the red on Friday,
as the pound climbed on a report that the British government was
more likely to delay a key Brexit vote for fear that it would
fail.
What did markets do?
Giving up earlier gains, the U.K.'s FTSE 100 fell 0.3% to
6,923.93, after finishing up 0.5% on Thursday. The index is looking
at a 1.3% gain for the week.
That loss came as the pound charged up to $1.2802 from $1.2749
late in New York Thursday.
What is driving the markets?
(http://www.marketwatch.com/story/us-gains-312000-jobs-in-final-month-of-2018-soaring-above-wall-street-forecast-2019-01-04)The
pound spiked
(http://www.marketwatch.com/story/british-pound-climbs-as-likelihood-of-brexit-delay-rises-2019-01-11)
on a report in the Evening Standard that said Prime Minister
Theresa May's cabinet members saw the likelihood of a Brexit delay
rising. The U.K. Parliament is slated to vote on her Brexit deal on
Jan. 15, but market participants aren't sure she can shore up
enough votes.
A stronger pound can weigh on the FTSE 100, as the index's
multinational companies generate most of their sales in other
currencies.
An influential lobby group for U.K. businesses will on Friday
warn that a crash-out Brexit, without a trade pact in place, would
shrink the country's economy by 8% and put thousands of jobs at
risk
(https://www.fnlondon.com/articles/brexit-brief-business-lobby-warns-of-risks-to-thousands-of-uk-jobs-20190111).
On Thursday, the ratings agency S&P Global Ratings said it
could reassess its guidance on U.K. banks if the country is forced
into a disorderly exit from the EU.
Investors also got data that showed Britain's economy slowed in
the three months leading to November, official data from the Office
of National statistics showed on Friday. Expansion was at its
slowest pace in six months as factories suffered from difficult
trade conditions ahead of Brexit, Reuters reported
(https://uk.reuters.com/article/uk-britain-economy/uk-economic-growth-hits-six-month-low-manufacturing-slides-idUKKCN1P50X7).
London was also lower as Wall Street was pointing to a weaker
session and most of European markets were in the red.
What stocks are active?
Home builders were leading gainers (TW.LN)after upbeat results
from
(http://www.marketwatch.com/story/taylor-wimpey-expects-one-off-charge-over-pensions-2019-01-09)with
Taylor Wimpey PLC (TW.LN) on Thursday. Taylor Wimpey and Persimmon
PLC (PSN.LN) shares rose 5% each.
Rolls-Royce Holdings PLC (RR.LN) gained 1.4%.
Downside pressure came from oil companies, with Royal Dutch
Shell PLC A (RDSA.LN) (RDSA.LN) off 0.5% and BP PLC (BP.LN) (BP.LN)
down 0.6%. Those losses came as oil prices gave up an earlier lead
(http://www.marketwatch.com/story/oil-prices-lifted-for-10th-day-as-dollar-softens-2019-01-11)
and turned negative.
Software company Sage Group PLC (SGE.LN) dropped nearly 2%.
(END) Dow Jones Newswires
January 11, 2019 08:48 ET (13:48 GMT)
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