LONDON MARKETS: FTSE 100 Suffers 3.4% Weekly Slide As Markets Tumble On Trade-war Fears
23 März 2018 - 6:57PM
Dow Jones News
By Sara Sjolin, MarketWatch
Micro Focus breaks 9-day losing run
U.K. stocks ended lower on Friday, with fears of a global trade
war hurting investor appetite after U.S. President Donald Trump
announced import tariffs on at least $50 billion of Chinese
products.
Smiths Group topped the list of declines in London after
reporting a fall in profit.
What are markets doing?
The FTSE 100 index lost 0.4% to 6,921.94, ending at its lowest
close since Dec. 12, 2016, according to FactSet data. For the week,
the London benchmark finished down 3.4%, its biggest weekly loss
since early February.
The pound rose to $1.4150
(http://www.marketwatch.com/story/dollar-hits-lowest-yen-level-since-2016-election-as-trade-war-woes-spark-turmoil-2018-03-23)from
$1.4096 late Thursday in New York.
Read:These 5 charts show how trade war fears are rattling the
markets
(http://www.marketwatch.com/story/these-5-charts-show-how-trade-war-fears-are-rattling-the-markets-2018-03-23)
What is driving the market?
Trade war fears were back in focus on Friday after tensions
between the U.S. and China escalated. Trump's plans to slap more
tariffs on Chinese products have already triggered threat of
retaliatory actions from the Asian powerhouse
(http://www.marketwatch.com/story/china-plans-3-billion-in-retaliatory-tariffs-against-us-goods-2018-03-22),
which rolled out measures to impose tariffs on up to $3 billion of
U.S. imports, such as fruit, pork and recycled aluminum.
China's tariff list didn't include big-ticket U.S. exports such
as soybeans and Boeing airplanes, interpreted as Beijing leaving
room to escalate or negotiate.
Also on Thursday night, Trump formally approved temporary
exclusions
(http://www.marketwatch.com/story/eu-plus-six-other-nations-get-temporary-us-tariff-reprieve-2018-03-23)
from steel and aluminum tariffs until May 1 for Argentina,
Australia, Brazil, Canada, Mexico, European Union nations and South
Korea.
Closer to home, traders were also waiting to see whether EU
leaders at a summit in Brussels will approve the U.K.'s Brexit
transition deal. The agreement was reached on Monday between the
EU's and the U.K.'s Brexit negotiators, Michel Barnier and David
Davis, in what is seen as a significant step in avoiding a
cliff-edge divorce next year. The EU leaders are widely expected to
endorse the agreement.
What are strategists saying?
"Risk appetite has plummeted as fears over protectionism and a
trade war between the world's two largest economies have taken
hold," said Richard Perry, market analyst at Hantec Markets, in a
note.
"China's response was 'China is not afraid of and will not
recoil from a trade war,' according to the China embassy in
Washington. Although China has only announced around $3bn of
tariffs on U.S. goods, so far, these are not the words of a nation
willing to stand aside and let this happen quietly. It may be that
quite how China deals with this situation in the coming days will
determine the market's appetite for risk again," he added.
Which stocks are in focus?
Shares of Smiths Group PLC (SMIN.LN) lost 4.4% after the
engineering company' said profit fell in the fiscal first half of
the year
(http://www.marketwatch.com/story/smiths-group-profit-drops-in-first-half-2018-03-23),
hit by higher research costs and lower margin.
On an upbeat note, shares of Next PLC (NXT.LN) jumped 7.7% after
the U.K. high street retailer reported a drop in earnings
(http://www.marketwatch.com/story/next-cites-challenging-year-as-profit-falls-2018-03-23)
that wasn't as bad as feared.
GlaxoSmithKline PLC (GSK.LN) (GSK.LN) added 3.3% after the
drugmaker said its shingles vaccine, Shingrix, has been approved
(http://www.marketwatch.com/story/gsks-shingles-vaccine-approved-in-europe-japan-2018-03-23)
for adults aged 50 and older in Europe and Japan. The U.K. pharma
giant also said it has ended talks to buy Pfizer Inc.'s
(http://www.marketwatch.com/story/gsk-ends-talks-for-pfizer-consumer-health-unit-2018-03-23)(PFE)
consumer-healthcare business.
Micro Focus International PLC (MCRO.LN) rose 4.9%, ending a
nine-session losing run. The shares still ended the week 49% lower
after the software maker warned on its outlook and said its CEO has
resigned on Monday.
Read:It's half off for this Hewlett-Packard spinoff's stock--why
that's still not a great deal
(http://www.marketwatch.com/story/its-half-off-for-this-hewlett-packard-spin-offs-stock-why-thats-still-not-a-great-deal-2018-03-24)
(END) Dow Jones Newswires
March 23, 2018 13:42 ET (17:42 GMT)
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