LONDON MARKETS: London Markets Fail To Gain From Falling Pound As Trump Reignites Trade War Fears
July 17 2019 - 7:48AM
Dow Jones News
By Callum Keown
London markets drifted lower as the FTSE 100 failed to
capitalise on the pound's descent as Donald Trump sparked fresh
trade war fears.
The blue-chip index slid 0.2% after U.S. President Donald Trump
threatened further tariffs on Chinese goods.
Domestically-focused stocks made losses as sterling continued
its decline after slipping to two-year lows on Tuesday.
Major exporters BP (BP.LN) and Shell (RDSA.LN) both dropped
reacting to falling oil prices.
What's moving the markets?
The pound continued to fall on no-deal Brexit concerns
(http://www.marketwatch.com/story/british-pound-hits-new-two-year-low-as-brexit-pressure-continues-2019-07-17).
Sterling slipped below $1.24 for the first time in 27 months on
Tuesday as Brexit fears and economic growth uncertainty weighed on
the currency.
U.K. inflation held steady at the Bank of England's 2% target
year-on-year in June, giving the central bank no reason to cut
interest rates.
ING economist James Smith said a rate cut was unlikely any time
soon due to the "benign inflation backdrop."
He said: "Markets are now pricing almost a 50% chance of easing
in 2019.
"However, with the growth outlook continuing to be dominated by
Brexit uncertainty, we think it is equally unlikely that
policymakers will look to increase rates this year."
The U.S. closed lower on Tuesday and Asian stocks followed
overnight after Donald Trump threatened to impose tariffs on a
further $325bn of Chinese imports if he wanted.
Separately, London house prices fell 4.4% in the 12 months
ending May, the sharpest fall since 2009, the Office for National
Statistics said.
Which stocks are active?
Travel and insurance company Saga (SAGA.LN) rose 4.3% after
activist investor Elliott disclosed a 5.1% stake in the embattled
firm. Saga shares plunged last month after the company warned its
tour operations were set to take a hit due to a competitive
marketplace and political uncertainties.
Chemicals and sustainable tech firm Johnson Matthey (JMAT.LN)
dipped 3.5% after lowering profit forecasts at its Clean Air unit,
due to China delaying the rollout of strict emissions rules. The
division produces pollution filters for cars and trucks.
(END) Dow Jones Newswires
July 17, 2019 07:33 ET (11:33 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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