LONDON MARKETS: Banks Rise, But FTSE 100 Fails To Find A Higher Footing
September 21 2017 - 3:50AM
Dow Jones News
By Carla Mozee, MarketWatch
Miners pull back as rising dollar hits commodity prices
U.K. stocks struggled to find momentum Thursday, even as bank
shares rose after the U.S. Federal Reserve hinted at an
interest-rate rise and outlined plans to begin winding down its
bond buys.
The FTSE 100 index was up less than 1 point at 7,272.64 after
opening slightly lower. The financial, oil and gas, and industrial
groups rose, while utility, basic materials and consumer-related
shares were among decliners. On Wednesday, the London blue-chip
benchmark closed down 0.1%
(http://www.marketwatch.com/story/ftse-100-edges-up-as-fed-decision-takes-center-stage-2017-09-20).
After trading in London closed Wednesday, the Fed said it will
begin to shrink its huge $4.5 trillion balance sheet in October
(http://www.marketwatch.com/story/feds-yellen-says-low-inflation-a-mystery-but-not-mysterious-enough-to-keep-rates-low-2017-09-20).
The U.S. central bank also signaled plans for one more increase in
interest rates before the end of 2017, which should lift borrowing
costs for auto loans, mortgages and business loans. Fed policy
makers also hinted at another three rate hikes in 2018.
"This may have surprised investors looking for a downward
revision in the rate path due to the recent soft patch in
inflation. As a result, the probability for another rate hike by
December jumped to 70%, and the market bought dollars
aggressively," said Charalambos Pissouros, senior analyst at
IronFX, in an note.
Bank boost: The prospect of higher interest rates boosted bank
stocks on Wall Street
(http://www.marketwatch.com/story/financial-stocks-spike-up-after-fed-with-bank-of-america-and-wells-fargo-shares-swinging-higher-2017-09-20),
and similar shares in U.K. and Europe followed suit. In London,
Barclays PLC (BCS) (BCS) and Royal Bank Of Scotland Group (RBS.LN)
(RBS.LN) each rose by 1.8%.
In the group, HSBC Holdings PLC (HSBA.LN) (HSBA.LN) and Lloyds
Banking Group (LLOY.LN) (LLOY.LN) each picked up 0.7%, while
Standard Chartered (STAN.LN) was 0.5% higher.
Mining down: Meanwhile, shares of miners fell, as commodity
prices came under pressure from a rise in the U.S. dollar after the
Fed's announcement. Gold , which like other metals is priced in
dollars, slumped more than 1%.
Shares of gold producers Fresnillo PLC (FRES.LN) and Randgold
Resources PLC (RRS.LN) lost 3.1%, respectively. Antofagasta PLC
(ANTO.LN) was down 2.7% and Rio Tinto PLC (RIO) (RIO) (RIO)
declined 1.9%.
But Anglo American PLC (AAL.LN) rose 1.6%, after the family
trust of Anil Agarwal, the founder of India's largest mining
company Vedanta Resources PLC, revealed plans to ramp up its
investment in the mining heavyweight by as much as $2 billion
(http://www.marketwatch.com/story/agarwal-plans-2-bln-boost-to-anglo-american-stake-2017-09-21).
That would make Volcan Investments Ltd., the largest stakeholder in
Anglo American.
Stock movers: Capita PLC shares (CPI.LN) tumbled 10% after the
outsourcing and professional services company posted a 26% fall in
pretax profit for the first half of the year
(http://www.marketwatch.com/story/capita-profit-falls-26-but-trading-in-line-2017-09-21).
It did say that trading was broadly in line with expectations.
CRH PLC (CRG.DB) gained 3%. The Irish building materials
supplier said it has agreed to buy Ash Grove Cement Co
(http://www.marketwatch.com/story/crh-agrees-to-buy-ash-grove-cement-in-35-billion-deal-2017-09-21).(ASHG)
in a deal valuing the U.S. cement provider at $3.5 billion, the
companies said.
(http://www.marketwatch.com/story/crh-agrees-to-buy-ash-grove-cement-in-35-billion-deal-2017-09-21)
Johnson Matthey PLC (JMAT.LN) was up 2.2% after the
measuring-devices manufacturer backed its guidance for fiscal 2018
(http://www.marketwatch.com/story/johnson-matthey-sees-sales-growth-backs-guidance-2017-09-21)
and said it expects sales to grow by around 6%.
Pound holds: As the dollar largely gained, sterling still
managed to hold to slightly higher ground Thursday. The pound was
buying $1.3504, compared with $1.3494 late Wednesday in New
York.
(END) Dow Jones Newswires
September 21, 2017 04:35 ET (08:35 GMT)
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