LONDON MARKETS: Heavyweight U.K. Banks Weigh On FTSE 100
January 22 2019 - 8:04AM
Dow Jones News
By Emily Horton
EasyJet soars following earnings
The FTSE 100 struggled on Tuesday, as the London banking sector
came under pressure after earnings from Swiss bank UBS Group AG
fell short of analysts' expectations.
Energy stocks were also weaker as oil prices fell on continued
concerns about global growth
(http://www.marketwatch.com/story/oil-slumps-on-renewed-global-growth-fears-2019-01-22),
most recently sparked by a warning from the International Monetary
Fund and Chinese data reported Monday.
What are markets doing?
The U.K.'s FTSE 100 lost 0.4% to 6,940.87, after finishing
mostly unchanged on Monday, when U.S. markets were closed for a
holiday. U.S. stock futures were weaker
(http://www.marketwatch.com/story/dow-futures-drop-nearly-200-points-as-growth-trade-worries-fester-2019-01-22)
on Tuesday.
The British pound rose slightly to $1.2910 from $1.2891, late on
Monday in New York. Russ Mould, investment director at AJ Bell put
sterling's weak performance down to the "latest twists and turns in
the Brexit saga".
What's driving the market?
After China posted the slowest annual pace of annual growth
since 1990
(http://www.marketwatch.com/story/china-posts-slowest-economic-growth-since-1990-2019-01-20),
President Xi Jinping reportedly convened a meeting of high-level
Communist Party officials
(https://www.abc.net.au/news/2019-01-22/xi-jingping-china-president-warns-black-swans-grey-rhinos/10736442),
urging them to be alert over "black swan" and "gray rhino"
financial events in face of an economic pullback. Trade tensions
are partly to blame for the weak data.
In the U.K., Jeremy Corbyn, leader of the opposition Labour
Party, has backed a plan
(http://www.marketwatch.com/story/brexit-brief-labour-leader-backs-possible-referendum-rerun-2019-01-22)to
give politicians a vote on whether the country should hold a second
referendum on its membership of the European Union. Corbyn's party
wants to give parliament the chance to vote on options to end the
Brexit stalemate in Westminster.
UBS said Tuesday that it swung to a profit in the fourth quarter
of the year but missed analysts' expectations
(http://www.marketwatch.com/story/ubs-swings-to-profit-but-misses-expectations-2019-01-22-14854552).
The Swiss bank reported a net profit of $696 million for the
quarter compared with a loss of $2.42 billion a year earlier, when
it took hit from the U.S. tax overhaul of almost $3 billion.
What stocks are active?
U.K. banking stocks were under pressure following the UBS miss.
The Royal Bank of Scotland Group PLC (RBS.LN) lost 1.7%, Barclays
PLC (BCS) dropped 1.6%, Lloyds Banking Group PLC (LLOY.LN) lost
0.9% and HSBC Holdings PLC (HSBA.LN) fell 1.1%.
Heavyweight BHP Group PLC (BHP.LN) lost 1.5% after the miner
reported weaker quarterly production of commodities
(http://www.marketwatch.com/story/bhp-output-falls-forecasts-productivity-hit-2019-01-22)
including iron ore and petroleum in its latest update. Rio Tinto
PLC (RIO.LN) lost 1.8%.
Royal Dutch Shell PLC (RDSA.LN) dropped 2% after Morgan Stanley
downgraded the stock to underweight and as oil prices declined.
Budget airline EasyJet PLC (EZJ.LN) surged 5.8%, after
announcing revenue per seat had dropped in its first quarter
(http://www.marketwatch.com/story/easyjet-posts-revenue-drop-sees-decline-ahead-2019-01-22),
but that of the three-month period rose. Bernstein Research
described revenue per seat as better than expected and guidance on
a decline in revenue per seat for the first half of the year is in
line with its forecasts. Hargreaves Lansdown said EasyJet remains
in on course to hit full-year targets.
(END) Dow Jones Newswires
January 22, 2019 08:49 ET (13:49 GMT)
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