LONDON MARKETS: London Stocks Rise, Buoyed By Materials Shares And Trade Optimism
August 20 2018 - 11:52AM
Dow Jones News
By Barbara Kollmeyer, MarketWatch
Sage tumbles on downgrade; Mulberry hit by profit warning
The U.K.'s main stock index pushed higher to its third straight
gain on Monday, buoyed in part by optimism over a coming U.S.-China
trade meeting.
Sage Group PLC fell sharply on a downgrade, while among smaller
companies, Mulberry Group PLC got crushed by a profit warning.
What are markets doing?
The U.K.'s FTSE 100 rose 0.4% to 7,591.26. The index has fallen
2% this month, in part because of a 1.4% decline last week, its
biggest since the week ended March 23, according to FactSet
data.
The pound was buying $1.2719, a gain of 0.1% against the
dollar.
What is driving the market?
London tracked global equity markets higher on signs that the
U.S. and China are making efforts to resolve trade differences. A
report in The Wall Street Journal said negotiators on both sides
are mapping out talks
(http://www.marketwatch.com/story/stock-futures-inch-up-putting-indexes-near-records-2018-08-20)
aimed at resolving major differences by November. The issue has
proved an overhang for global stocks at times over the past several
months.
U.S. stocks opened modestly higher as trading got under way
(http://www.marketwatch.com/story/stock-futures-inch-up-putting-indexes-near-records-2018-08-20).
Helped along by global trade optimism, commodity-related stocks
pushed higher, with heavily-weighted Glencore (GLEN.LN) rose 0.l3%,
fading late in the session. BHP Billiton PLC (BLT.LN) (BHP.AU) rose
1%, and Royal Dutch Shell Group(RDSA.LN)(RDSA.LN) added 0.7%.
Some relative calm over Turkey's currency crisis was also a
factor for optimism Monday. The U.S. rejected a bid by the country
to tie relief for a big Turkish bank to the release of a U.S.
pastor, and the lira about 2% against the dollar. For the month of
August, the emerging market currency has lost about a quarter of
its value against the greenback, amid fears the country will
trigger a wider emerging market crisis.
The U.K.'s negotiations to exit from the European Union will
swing into focus this week with the Brexit minister Dominic Raab
due in Brussels for talks Tuesday with the EU's chief negotiator
Michel Barnier.
What stocks are in focus?
Sage Group PLC (SGE.LN) led the losers for the FTSE 100,
tumbling 7% after the enterprise-software maker was downgraded to
sell from hold by Deutsche Bank, where analysts cited increasing
competition in its core midmarket business.
Persimmon PLC (PSN.LN) and Taylor Wimpey PLC (TW.LN) also were
on the losing side, each falling 0.7%. Rightmove reported a 2.3%
drop in average asking prices
(http://www.marketwatch.com/story/uk-house-prices-see-sharp-drop-in-august-rightmove-2018-08-20)
of newly listed homes on a seasonal basis in August.
Among smaller companies, Mulberry Group PLC (MUL.LN) plunged 30%
after the retailer warned earnings would take a hit
(http://www.marketwatch.com/story/mulberry-shares-sink-after-profit-warning-2018-08-20)
if sales from its concessions in the House of Fraser department
stores don't start to recover.
(END) Dow Jones Newswires
August 20, 2018 12:37 ET (16:37 GMT)
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