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Britain’s FTSE falls on trade fears as pound strengthens

The UK’s blue-chip index fell on Friday as investors awaited news on whether the United States would impose new tariffs on Chinese imports while a data breach at British Airways triggered a fall in its owner’s shares.

The FTSE 100 .FTSE fell 0.6 percent at 7,277.70 points, accelerating losses in afternoon trading as the pound rose after EU negotiator Michel Barnier said the bloc was open to discussing other “backstops” on the Brexit issue.

“As it has done for much of the week, the pound came to dominate on Friday, punishing the FTSE in the process,” said Connor Campbell, analyst for Spreadex.com.

Later in the session White House Economic Adviser Larry Kudlow told CNBC that the United States continued to talk with China about a number of trade issues but added that so far China has not met U.S. requests.

The FTSE ended at a fresh five-month low, down more than 2 percent on the week.

Shares in British Airways’ parent International Airlines Group (ICAG.L) fell 1.4 percent after the airline reported the theft of financial and personal data of potentially hundreds of thousands of customers.

Among mid-caps, British pub operator Greene King (GNK.L) surged 7.5 percent after reporting a boost in sales thanks to exceptionally warm weather and the soccer World Cup.

The company, which owns ale brands such as Greene King IPA, Old Speckled Hen and Abbot Ale, said it sold 3.7 million pints of beer during England’s seven World Cup matches.

Shares in Ashmore (ASHM.L) rose 1.4 percent after the emerging markets asset manager published full-year results.

UK-focused oil company EnQuest (ENQ.L) fell more than 13 percent after announcing plans for a rights issue to finance acquisition of an oilfield from BP (BP.L).

Online retail trading platform Plus500 (PLUSP.L) lost 7.3 percent to 15.44 pounds after Playtech (PTEC.L) said it has sold its entire 10 percent shareholding for about 176 million pounds, equating to 15.50 pence per share.

Source: UK Reuters

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Weak pound, higher commodity stocks boost FTSE

The UK’s top share index rose on Monday, starting September on a stronger note as a weaker pound and a bounce across commodity stocks helped British equities outperform continental peers.

The blue chip FTSE 100 .FTSE index was up 1 percent at 7,504.60 points at its close, while mid caps .FTMC were flat in percentage terms.

A rise in oil stocks contributed more than 21 points to the FTSE 100, the biggest sectoral boost to the index.

Shares in Royal Dutch Shell (RDSa.L) and BP (BP.L) were up 1.9 percent and 1.2 percent respectively as the price of oil rose, supported by concerns that falling Iranian output will tighten markets once U.S. sanctions hit in November. [O/R]

UK mining stocks also rose, with Glencore (GLEN.L), BHP Billiton (BLT.L) and Anglo American (AAL.L) up as much as 1.9 percent. [MET/L]

Other major stock markets across Europe were subdued on Monday, however, as investors fretted about an escalation in the trade war between the United States and China, which had also weighed on Asian markets overnight.

“Investors still have mixed outlooks regarding the global trade situation as well as the turmoil in emerging markets caused by the recent Turkish Lira crisis,” Pierre Veyret, technical analyst at ActivTrades, said.

“This means fewer traders are going long on stocks right now.”

A weaker pound was another factor keeping the FTSE in positive territory. A fresh round of Brexit-related headlines dented demand for the currency, as critics at home and abroad ramped up their opposition to Prime Minister Theresa May’s plans for leaving the European Union.

A depressed pound lifted the FTSE 100’s big, dollar-earning constituents on the day.

However, worries over Brexit kept investors cautious on UK equities.

“The UK is a defensive, high-dividend yielding market which might have a problem if bond yields move sustainably higher, and if global equities advance, as we expect,” equity strategists at J.P. Morgan said in a note. They are underweight UK equities.

“We look for a stronger GBP, which will weigh on the performance of FTSE 100.”

Veterinary firm Dechra Pharmaceuticals (DPH.L) was the biggest faller among mid cap stocks, its shares tumbling more than 21 percent. This was their biggest one-day loss since January, 2003.

Dechra Pharma dropped after it said it would implement a plan to navigate a hard Brexit, adding that the measure may result in 2 million pounds ($2.6 million) of additional expense.

Analysts at Investec said that while Dechra’s preliminary results were ahead of their expectations, they were introducing some caution into their forecasts to reflect the potential impact of accounting standard changes, sanctions on Iran and a hard Brexit.

Source: UK Reuters