LONDON MARKETS: U.K. Stocks Finish Down Slightly As Trade Conflict Spooks Buyers
June 18 2018 - 11:28AM
Dow Jones News
By Sara Sjolin and Victor Reklaitis, MarketWatch
Virgin Money agrees to CYBG takeover
U.K. stocks ended slightly lower Monday, tracking a downbeat
mood across Europe, where fears of an escalating trade conflict
between the U.S. and China and political uncertainty in Germany
helped send markets lower.
What are markets doing?
The FTSE 100 index slipped less than 0.1% to end at 7,631.33,
building adding slightly to a 1.7% slump from Friday.
The pound declined to $1.3247, from $1.3280 late Friday in New
York.
What is driving the market?
Trade tensions remained in the spotlight after China announced
plans for retaliatory tariffs on U.S. goods worth $34 billion,
including soybeans, whiskey and electric cars. Beijing's move comes
after U.S. President Donald Trump last week approved a first round
of levies on about $50 billion in Chinese products and reportedly
was drawing up a list for a second wave of tariffs against
China.
Meanwhile, in Europe, German Chancellor Angela Merkel's fragile
coalition was under pressure
(https://www.wsj.com/articles/germanys-merkel-reaches-out-to-eu-members-over-immigration-dispute-1529272608?mod=searchresults&page=1&pos=2)
over migrant issues, prompting increasing concerns that the
government could falter. Merkel's Bavarian allies, the Christian
Social Union, will reportedly decide on Monday whether to defy the
chancellor on her immigration policies, which the CSU believes are
too soft.
What are strategists saying?
"Markets are finally beginning to wake up to the risks of a
global trade war, with equities falling across the globe. The
negotiating style of President Trump had allowed investors to
assume that his threats were hyperbole and part of his unique
diplomatic style, and that he would step away from the brink rather
than risk undermining the positive impact his previous policies
have had on the stock market," said Rebecca O'Keeffe, head of
investment at Interactive Investor, in a note.
Read:Trump's constant threats, reversals spur investors to see
him as the boy who cried 'Wolf!'
(http://www.marketwatch.com/story/trumps-constant-threats-and-reversals-spur-investors-to-see-him-as-boy-who-cried-wolf-2018-06-04)
Stock movers
DS Smith PLC's stock (SMDS.LN) fell 2.5% after the packaging
company released full-year results
(http://www.marketwatch.com/story/ds-smith-profit-rises-as-paper-prices-recover-2018-06-18).
Outside the FTSE 100, Virgin Money Holdings PLC (VM.LN) slipped
2.2% after the British lender accepted a GBP1.7 billion all-share
takeover offer
(http://www.marketwatch.com/story/virgin-money-accepts-cybgs-17-bln-all-share-bid-2018-06-18)
from CYBG PLC (CYBG.LN), the parent of British lenders Clydesdale
Bank and Yorkshire Bank. Shares in CYBG were down 0.7%.
(END) Dow Jones Newswires
June 18, 2018 12:13 ET (16:13 GMT)
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