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London stocks higher, pound lower on Brexit developments
LONDON, March 6, 2019 (BSS/AFP) – A weaker pound pushed stocks higher in
London Tuesday, while investors also mulled Brexit-influenced data, and Bank
of England contingency plans ahead of important talks in Brussels.
London’s FTSE 100 gained 0.7 percent, helped by a drop in the pound that
lifted share prices of multinationals listed on the benchmark index.
Eurozone indices closed higher as well after dipping in and out of
negative territory during the day.
“Stocks continue to shrug off no-deal Brexit worries, as UK and EU
negotiations are scheduled in Brussels ahead of the March 29 divorce
deadline,” analysts at Charles Schwab wrote.
In New York, trading was subdued at midday with the Dow Jones Industrial
Average essentially unchanged.
The British pound retreated as hiring by companies dropped at the fastest
pace in seven years amid Brexit uncertainty, though other data showed that
output in Britain’s key services sector had risen slightly in February.
The Markit/CIPS services survey rebounded to 51.3 in February from a 29-
month low of 50.1 in January.
The data “suggests that at least some of the concern about Brexit’s impact
on the economy has been overdone”, noted research group Capital Economics in
a client note.
Meanwhile, the EU’s lead Brexit negotiator Michel Barnier met Britain’s
negotiating team as both sides sought solutions a few weeks before this
month’s looming Brexit deadline.
The Bank of England warned that Europe’s financial system faced “potential
risks” from a no-deal Brexit, as it extended weekly lending facilities to
include euros.
The BoE warned in a statement that “some disruption to cross-border
services is possible and, in the absence of other actions by EU authorities,
some potential risks to financial stability remain.”
MORE/HR/1018
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EUROPE-MARKETS 2 LAST LONDON
– US-China trade hope –
Earlier Tuesday, most Asian stock markets retreated as investors awaited
developments in China-US trade talks, though Shanghai posted a strong gain as
China unveiled massive tax cuts to support the economy.
Optimism that the world’s top two economies were heading for a tariffs
deal was replaced by a need for clarity on any agreement.
Shares have enjoyed a blockbuster start to the year, but “trade optimism
could only take the stock market so far”, said Oanda senior market analyst
Alfonso Esparza.
“High-level talks between the two largest economies have been ongoing and
although they appear close to bearing fruit, the fact remains that the
optimism has already been priced in,” he added.
Tokyo ended 0.4 percent lower, Sydney eased 0.3 percent, Singapore and
Seoul were each 0.5 percent off and Taipei dropped 0.4 percent.
But Shanghai jumped 0.9 percent while Hong Kong inched up after China
announced hundreds of billions of dollars worth of tax cuts to stimulate the
economy.
Beijing will also increase spending, with the fiscal deficit set to
increase to 2.8 percent of GDP, from 2.6 percent last year.
The government is aiming for economic growth of 6.0-6.5 percent in 2019,
below last year’s 6.6 percent, the lowest level in three decades.
The move comes as Chinese leaders are struggling to address a mounting
debt crisis as well as the trade row.
BSS/AFP/HR/1020