LONDON MARKETS: FTSE 100 Heads For A Win, Even As China Warning Drags Down Miners
December 07 2017 - 4:12AM
Dow Jones News
By Carla Mozee, MarketWatch
Pound stays under pressure, helping stocks, as May scrambles to
nail Brexit issue
U.K. stocks edged higher Thursday, aided by a fall for the pound
that has been driven by worries over the progress of Brexit
negotiations, especially about whether Prime Minister Theresa May
can bring warring allies into line over what should come next.
But mining shares dragged on London's blue-chip benchmark, after
a warning that Chinese banks may not have enough capital to weather
potential losses.
Deal news was brewing in the betting industry, sending shares of
Ladbrokes Coral PLC and William Hill PLC higher in the mid-cap
market.
What markets are doing: The FTSE 100 index was up 0.1% at
7,352.36, with tech, industrial and consumer goods shares moving
higher. But the basic materials, telecom and oil and gas groups
were in the red. On Wednesday, the benchmark rose 0.3%,
(http://www.marketwatch.com/story/ftse-100-veers-toward-second-straight-loss-with-miners-under-pressure-2017-12-06)
and a win Thursday would be its second in a row.
The pound traded at $1.3373, down from $1.3394 late Wednesday in
New York. Against the euro, sterling bought EUR1.1339, down from
EUR1.1353.
What's moving markets: The International Monetary Fund has
called for banks in China to bump up their capital buffers in the
wake of a credit boom in the world's second-largest economy. In a
review of China's financial system, the IMF said lenders may not
have enough capital to weather potential losses
(http://www.marketwatch.com/story/imf-warns-chinese-banks-may-be-short-on-assets-to-offset-potential-credit-losses-2017-12-06)
from those credit risks.
Mining stocks in the U.K. can be sensitive to developments in
China, where companies are big buyers of precious and industrial
metals.
Closer to home, worries over the progress of Brexit negotiations
and in particular the chances for a deal on the Irish border issue
have been weighing on the pound and aiding stocks. A weaker pound
can help shares of exporters on the FTSE 100, as it boosts the
value of foreign sales. Around 75% of revenue for the index's
components are generated overseas.
Investors are focused on whether the U.K. can nail a deal on the
Irish border, the last of three Brexit issues that have to be
resolved before Friday, a deadline set by lead EU negotiator Michel
Barnier
(https://www.theguardian.com/politics/2017/dec/06/uk-has-48-hours-to-agree-potential-deal-or-brexit-talks-cannot-progress).
EU leaders are meeting Dec. 14-15 in Brussels, where they will
assess whether sufficient progress in the U.K. withdrawal talks to
move onto the next stage of trade and transition arrangements.
U.K. Prime Minister Theresa May is working on a new proposal for
the Irish border that she will present by Thursday, Ireland's Prime
Minister Leo Varadkar said, according to media reports. A dispute
with May's Northern Ireland political allies over the issue of
whether to have a "hard" or "soft" border scuttled a potential deal
on Monday.
Stock movers: In the basic materials sector, which makes up a
roughly 8% weighting on the FTSE 100, shares of Rio Tinto PLC (RIO)
(RIO) (RIO) fell 1%, Anglo American PLC (AAL.LN) lost 0.7%,
Fresnillo PLC (FRES.LN) gave up 0.3%, and BHP Billiton PLC (BLT.LN)
(BHP.AU) (BHP.AU) moved 0.2% lower.
Topping the FTSE 100, broadcaster Sky PLC (SKY.LN) rose 2.2%.
CNBC reported this week that Sky stakeholder 21st Century Fox Inc.
(FOX) is closing in on a deal to sell some assets to Walt Disney
Co. (DIS) .
Ladbrokes Coral Group PLC (LCL.LN) surged 26% on the mid-cap
FTSE 250 index as the bookmaker is in GBP3.9 billion takeover talks
with GVC Holdings PLC
(http://www.marketwatch.com/story/ladbrokes-shares-jump-on-39-billion-takeover-talks-with-gvc-2017-12-07)(GVC.LN)
William Hill PLC (WMH.LN) shares climbed 2% as that bookmaker
agreed to support Scientific Games Corp.'s (SGMS) proposed
acquisition of NYX Gaming Group Ltd. (NYX.V) . As part of the
agreement, William Hill plans to sell the 6.8 million NYX ordinary
shares it owns to Scientific Games.
(http://www.marketwatch.com/story/william-hill-to-back-scientific-gamess-buy-of-nyx-2017-12-07)
Other advancers on the FTSE 100 include equipment rental company
Ashtead Group PLC (AHT.LN) and building materials company CRH PLC ,
which were up 1.4% and 1%, respectively.
(END) Dow Jones Newswires
December 07, 2017 04:57 ET (09:57 GMT)
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