LONDON MARKETS: FTSE 100 Wobbles As Investors Look For Clarity On Trump Tariffs
March 08 2018 - 7:30AM
Dow Jones News
By Carla Mozee, MarketWatch
Pound falls vs. euro after ECB drops easing bias; Aviva shares
fall after earnings report
U.K. blue-chip stocks wobbled Thursday as investors sifted
through a round of corporate updates while awaiting more details
about potential U.S. tariffs on steel imports that analysts have
said could stoke a global trade war.
London-listed large cap stocks were largely unchanged after the
European Central Bank removed the easing bias from its monetary
policy statement.
How markets are moving
The FTSE 100 index was up 0.1% at 7,163.18 and has been swaying
between small gains and losses. Mining and oil shares were losing
the most while the utility and telecom group topped advancers. On
Wednesday, the index rose 0.2%
(http://www.marketwatch.com/story/ftse-100-slides-as-cohns-resignation-shakes-the-market-2018-03-07)
to mark a third consecutive win.
The pound bought $1.3876, down from $1.3903 late Wednesday in
New York.
What's driving markets
U.K. and European equity markets appeared to be in wait-and-see
mode with key updates in store for global markets. U.S. President
Trump was reportedly expected on Thursday to sign an order to slap
tariffs on steel and aluminum imports into the U.S. Meanwhile, the
Trump administration has indicated Canada and Mexico may exempt if
the countries strike a new NAFTA agreement. Trump is expected to
make an announcement at 3:30 p.m. Eastern Time, according to media
reports
(http://www.marketwatch.com/story/trump-tariff-plan-expected-to-exempt-canada-mexico-after-house-republicans-protest-2018-03-08).
Read:How stock-market investors are bracing for a potential
trade war
(http://www.marketwatch.com/story/how-stock-market-investors-are-bracing-for-a-potential-trade-war-after-cohn-exit-2018-03-07)
Analysts have said a global trade war could weigh on economic
growth world-wide.
The European Union has said it's preparing its own tariffs if
Trump moves ahead with the levies. European Central Bank President
Mario Draghi will likely be asked Thursday about tariffs and its
impact on the eurozone at his press conference after the release of
the central bank's latest monetary policy decision. Draghi's news
conference is set for 1:30 p.m. London time, or 8:30 a.m. Eastern
Time.
The European Central Bank during afternoon trade issued its
monetary policy statement. The bank dropped the line from the
statement that had said it would increase its quantitative easing
measures if the eurozone's economic outlook worsens. The ECB did,
however, reiterate that the current EUR30-billion-a-month stimulus
program will "run until the end of September 2018, or beyond, if
necessary. The ECB left interest rates unchanged, as expected
(http://www.marketwatch.com/story/european-central-bank-leaves-rates-policy-statement-unchanged-2018-03-08).
The euro was up against the pound following the statement,
buying 0.8950 pence compared with 0.8926 pence late Wednesday.
Read:Here's the case for an unexpected tweak to the ECB's policy
guidance
(http://www.marketwatch.com/story/heres-the-case-for-an-unexpected-tweak-to-the-ecbs-policy-guidance-2018-03-07)
Also see: EU leader responds to Trump's tariff plan: 'We can
also do stupid'
(http://www.marketwatch.com/story/eu-leader-responds-to-trumps-tariff-plan-we-can-also-do-stupid-2018-03-07)
What strategists are saying
"It is still hard to avoid the sense that markets are
underestimating the prospect that this could all blow up into one
big mess, particularly since the departure of Mr. Cohn would appear
to suggest that he was losing the argument on trade policy, and
that steel and aluminum tariffs are merely the warm up act for
additional policy measures," said Michael Hewson, chief market
analyst at CMC Markets UK, in a note.
"This morning's Chinese trade data are only likely to reinforce
the U.S. administration's perception of unfair trade as Chinese
exports were seen to show a rise [of] 44.5% in February, the best
performance in over two years," he said.
Read:China's exports surge despite trade tensions
(http://www.marketwatch.com/story/chinas-exports-surge-despite-trade-tensions-2018-03-08)
Stock movers
G4S PLC (GFS.LN) fell 3.3%, with shares retreating from earlier
gains made after the security and consulting services company
declared a higher final dividend
(http://www.marketwatch.com/story/g4s-2017-pretax-profit-rises-30-raises-dividend-2018-03-08-34851154)
for the year and posted a rise in yearly pretax profit to GBP386
million ($536 million).
Aviva PLC shares (AV.LN) declined 0.9% even as the insurer said
profit in 2017 rose
(http://www.marketwatch.com/story/aviva-profit-rises-2-in-2017-to-return-500-mln-2018-03-08),
and that it expects to return GBP500 million ($694.3 million) in
excess cash to shareholders this year.
"Disappointments are few and far between, although committed
bears may point to a slightly softer General Insurance operating
profit, an uptick in operating expenses and a 'disappointing'
contribution from Canada," wrote Richard Hunter, Interactive
Investor's head of markets in a note about Aviva's results.
Off the FTSE 100, Countrywide PLC (CWD.LN) sank 8%, but was off
session lows, after the estate agent scrapped its dividend
(http://www.marketwatch.com/story/countrywide-scraps-dividend-swings-to-yearly-loss-2018-03-08),
citing the booking of a huge impairment charge and a slide in
earnings as reason for the move.
(END) Dow Jones Newswires
March 08, 2018 08:15 ET (13:15 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Apr 2024 to May 2024
FTSE 100
Index Chart
From May 2023 to May 2024