LONDON MARKETS: U.K. Stocks Fall As Brexit Headlines Drive Up Sterling
04 Dezember 2018 - 02:42PM
Dow Jones News
By Emily Horton
Trade concerns return to haunt resource stocks
London stocks fell Tuesday amid concerns over the details of a
trade truce between the U.S. and China, and as the pound surged
after a European court official said the U.K. can legally overturn
Brexit.
Banks, tobacco and mining stocks led the decliners.
How are the markets performing?
The FTSE 100 fell 0.8% to 7,003.21, after Monday's gain of
1.2%.
The British pound soared to $1.2800 from $1.2723 late Monday in
New York.
What is driving stocks?
Although the overall impact of the trade truce between the U.S.
and China remains positive, questions over what was actually agreed
this weekend have been raised. For example, President Donald
Trump's claim that China will remove tariffs on U.S. autos doesn't
appear to feature in the declaration that was agreed by both sides
over the weekend.
Meanwhile, sterling took off Tuesday after the advocate-general
of the European Court of Justice said the U.K. could overturn its
Brexit decision
(http://www.marketwatch.com/story/european-court-official-says-uk-can-unilaterally-overturn-brexit-2018-12-04)
without asking for permission from other E.U. member states. A
debate over Prime Minister Theresa May's Brexit deal begins
Tuesday, with a vote expected Dec. 11.
(https://www.cnbc.com/2018/12/03/brexit-eu-top-court-is-set-to-rule-on-article-50.html)A
stronger pound can weigh on the FTSE 100, because the index's
multinational companies generate most of their sales in other
currencies.
The governor of the Bank of England, Mark Carney, said food
prices could rise 10% in the U.K
(https://www.bbc.co.uk/news/business-46439969). due to Brexit, as
he faced further questioning by the U.K. parliament's Treasury
Select Committee over the results of the central bank's Brexit
stress test results.
What other stocks are active?
Telecommunications stock took a hit, with Vodafone Group PLC
(VOD.LN) falling by 1.8%.
Mining stocks were down, with Glencore PLC (GLEN.LN) falling by
1.7% and Rio Tinto PLC (RIO.LN) (RIO.LN) down by 1.1%. Banking
stocks were also down, with HSBC Holdings PLC (HSBA.LN) falling by
1%.
British American Tobacco Group PLC (BATS.LN) (BATS.LN) slid
1.7%.
Oil stocks were in the green, BP PLC (BP.LN) rose by 2% and
Royal Dutch Shell PLC (RDSA.LN) was up by 0.2%.
(END) Dow Jones Newswires
December 04, 2018 08:27 ET (13:27 GMT)
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