LONDON MARKETS: Pound Tumbles As British Factory Output Hits Seven-year Low Ahead Of Brexit Showdown
September 02 2019 - 6:45AM
Dow Jones News
By Callum Keown
The pound tumbled following dismal British manufacturing data on
Monday ahead of a crunch week for Brexit in Parliament.
The internationally-exposed FTSE 100 climbed 1.2% as the pound
continued its downward spiral on no-deal Brexit fears and weak
factory activity.
Domestic stocks were helped by Europe-wide positivity over
U.S.-China trade tensions
(http://www.marketwatch.com/story/european-stocks-nudge-higher-despite-fresh-us-china-tariffs-coming-into-force-2019-09-02),
with the FTSE 250 edging up 0.4%.
U.S. markets are closed on Monday for the Labor Day holiday.
What's moving the markets?
Sterling continued its descent on Monday, sinking 0.5% to
$1.2095 ahead of an important week of Brexit debate in
Parliament.
MPs opposing British Prime Minister Boris Johnson will bring
forward legislation blocking a no-deal Brexit later this week.
Conservative MPs voting against the government could be
deselected and thrown out of the party
(http://www.marketwatch.com/story/boris-johnson-takes-aim-against-opponents-of-brexit-plans-2019-09-02),
according to reports, ramping up the chances of the U.K. leaving
the European Union without a withdrawal agreement in place.
British factory activity hit a seven-year low in August, also
contributing to the pound's fall.
The IHS Markit/CIPS U.K. Manufacturing Purchasing Managers'
Index (PMI) dropped to 47.4 from 48 in July and business optimism
fell to a record low.
The survey cited economic and political uncertainty, which hit
domestic and export orders.
Neil Wilson, an analyst at Markets.com, said: "The manufacturing
PMI data is simply shocking.
"It's wrong to pin this all on Brexit--as the report authors
make clear, the global economic slowdown is the primary cause of
the decline, albeit there was some impact from supply-chain
reshoring as businesses seek to mitigate the impact of a no-deal
Brexit."
Which stocks are active?
AstraZeneca (AZN.LN) shares jumped 3.1% to all-time highs as the
pharmaceutical company said Farxig, its type-2 diabetes drug,
reduced the chances of cardiovascular death or worsening heart
failure by 26% in a recent trial. Its cardiovascular drug Brilinta
also reduced the risk of death and heart attack by 10%.
Gold miner Centamin climbed 1.1% as the company continued its
reshuffle, adding two new executive directors to the board. The
FTSE 250 company expects a stronger second half of the year from
its Sukari gold mine in Egypt.
(END) Dow Jones Newswires
September 02, 2019 07:30 ET (11:30 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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