LONDON MARKETS: London Markets Falter As Investors React To Historic Brexit Defeat
January 16 2019 - 03:31AM
Dow Jones News
By Emily Horton
London markets wobbled on Wednesday, as investors reacted to the
bigger-than-expected defeat of U.K. Prime Minister Theresa May's
Brexit plan.
Major oil companies led the losses.
How are the markets trading?
The FTSE 100 Index dipped 0.1% to 6,884.56 in early trading,
after finishing up 0.6% on Tuesday.
Despite a brief dip to $1.2670 on Tuesday evening, the British
pound managed to rebound strongly, rising to $1.2988 from
$1.2860.
What is driving the markets?
May has suffered a crushing defeat to her EU withdrawal
agreement, increasing the likelihood that the U.K. will have to
delay its exit from the bloc or suffer a no-deal Brexit.
Politicians rejected May's Brexit deal by a majority of 432 to
202, a majority of 230, the biggest defeat ever record in U.K.
parliamentary history. Jeremy Corbyn, leader of the opposition
Labour Party, tabled a vote of no confidence on Tuesday, which May
is expected to survive after a debate on the motion on
Wednesday.
May now has until Monday, Jan. 21 to pull together an
alternative agreement to present to parliament. She has vowed to
engage with parliament in a bid to achieve this.
In the U.S., President Donald Trump's partial government closure
continues. Marianne Lake, JP Morgan Chase & Co (JPM) chief
financial officer, has warned the shutdown could hit investment
banking fees
(https://www.fnlondon.com/articles/jpmorgan-finance-chief-warns-us-shutdown-will-hit-revenues-20190115),
bringing Wall Street's mergers and acquisitions bonanza to a
crunching halt.
Meanwhile, Germany's sharp slowdown has stoked fears that
China's economic woes are spreading globally, The Wall Street
Journal reports
(https://www.wsj.com/articles/germany-economy-slows-in-worrying-sign-for-global-growth-11547545471).
What stocks are active?
BP PLC (BP.LN) and Royal Dutch Shell Group PLC (RDSA.LN) both
declined by more than 1%. Miner Fresnillo (FRES.LN) also dropped by
over 1%.
Publisher Pearsons PLC (PSON.LN) fell 5.6% after narrowing its
guidance.
British house builders were the big gainers in the FTSE 100:
Taylor Wimpey (TW.LN) rose by 2% and Barratt London (BDEV.LN)
gained just under 2%.
(END) Dow Jones Newswires
January 16, 2019 04:16 ET (09:16 GMT)
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