LONDON MARKETS: FTSE 100 Ends At 7-week Low As Pound Jumps
June 28 2017 - 12:01PM
Dow Jones News
By Carla Mozee and Victor Reklaitis, MarketWatch
U.K. house prices reverse declines with 1.1% rise
U.K. blue-chip stocks finished with losses Wednesday, hit by a
surge in the pound and as shares in asset managers weighed on the
index in the wake of new rules for the industry.
The FTSE 100 fell 0.6% to end at 7,387.80, enduring its sixth
loss in seven sessions. The London benchmark suffered its lowest
close since May 11, according to FactSet data.
The pound was trading at $1.2940, up significantly from $1.2814
late Tuesday in New York, after Bank of England Gov. Mark Carney
said interest rates may have to go up
(https://www.wsj.com/articles/boes-carney-some-removal-of-stimulus-may-be-necessary-if-economy-improves-1498658542)
if the U.K. economy continues to show strength despite soft
consumer spending.
Stronger sterling tends to weigh on the FTSE 100, as a higher
value for the currency reduces the revenue generated overseas by
the index's multinational companies.
"Mark Carney, everyone's favourite dovish BOE governor, suddenly
declared that the bank might need to raise rates," said Chris
Beauchamp, chief market analyst at IG, in a note.
"As a result, the pound surged above $1.29 for the first time
since its election night drubbing, and this prompted the FTSE 100
to drop back to the lows of the day," Beauchamp added, referring to
the currency's fall following a parliamentary vote in early
June.
Meanwhile, Hargreaves Lansdown PLC (HL.LN) and Scottish Mortgage
Investment Trust PLC (SMT.LN) gave up 2.3% and 2%, respectively,
after the U.K.'s top financial watchdog laid out tough new rules
for asset managers
(http://www.marketwatch.com/story/uk-watchdog-lays-out-tough-new-rules-for-asset-managers-2017-06-28).
They were among the FTSE's biggest losers.
Read:Invest in these European underperformers now, before Daniel
Loeb does
(http://www.marketwatch.com/story/invest-in-these-european-underperformers-now-before-daniel-loeb-does-2017-06-28)
But commodities-related stocks helped limit losses, as oil and
metals prices traded higher. Miners Antofagasta PLC (ANTO.LN) and
BHP Billiton PLC (BLT.LN) closed higher by 1.7% and 0.9%,
respectively.
Economic data:U.K. house prices rose 1.1% in June,
(http://www.marketwatch.com/story/uk-house-prices-rise-11-reversing-declines-2017-06-28)
reversing three consecutive months of decline, according to
Nationwide Building Society.
Check out:Paddington Bear's important lesson for stock-market
investors
(http://www.marketwatch.com/story/paddington-bears-important-lesson-for-stock-market-investors-2017-06-28)
(END) Dow Jones Newswires
June 28, 2017 12:46 ET (16:46 GMT)
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