London Markets: FTSE 100 pulled down as Turkey contagion concerns grow

This post was originally published on this site

U.K. stocks traded solidly lower on Friday, dragged down alongside the broader European equity market, on mounting concerns that Turkey’s currency crisis will hurt eurozone banks, but London’s blue-chips market is on course to edge higher for the week.

U.K. stocks were little changed after a reading of British economic growth came in line with expectations.

How markets are moving

The FTSE 100 UKX, -0.75% fell 0.8% to 7,682.47. On Thursday, the index lost 0.5%, ending a four-session winning streak. But for the week, the benchmark was clinging to a modest gain of 0.3%.

The pound GBPUSD, -0.3353%  fell to $1.2782 from $1.2824 late Thursday in New York.

What’s driving markets

Equities across the region SXXP, -0.93% stumbled following a Financial Times report that the European Central Bank is growing more concerned about exposure of European banks to Turkey’s woes. The Turkish lira USDTRY, +6.4536%  was sent plunging to its lowest in a year against the U.S. dollar on Friday.

The lira’s slide comes on questions about the central bank’s independence in the face of growing power held by President Recep Tayyip Erdogan, as well as a political rift between Turkey and the U.S.

The euro EURUSD, -0.4338%  also dropped against the dollar “as investors feared European banks exposure to the lira. The common currency broke below the key 1.1500 support mark for the first time in more than a year. The fears also rippled to [the pound-dollar pair] which took out the 1.2750 barrier in early London dealing,” said Boris Schlossberg, managing director of FX strategy at BK Asset Management.

Read: Dollar index jumps to around one-year high as Turkey’s lira gets rocked

Spain’s BBVA SA BBVA, -4.20% BBVA, -1.87% Italy’s UniCredit SpA UCG, -3.37%  and France’s BNP Paribas SA BNP, -3.54%  are among the biggest lenders to Turkey and have come under closer scrutiny by the Single Supervisory Mechanism, the ECB’s arm charged with monitoring the region’s banks, according to the FT report.

Meanwhile, retail stocks were mostly lower as upscale apparel and accessories retailer House of Fraser went into administration after a collapse in talks between the company and its creditors. But Sports Direct International PLC SPD, -0.44%  has purchased the struggling chain for £90 billion, expanding a stake already held in House of Fraser by Sports Direct’s owner, Mike Ashley.

Stocks in focus

Among banking stocks, Barclays PLC BARC, -1.08%  gave up 1.1%, Standard Chartered PLC STAN, -0.92%  lost 0.9% and HSBC Holdings PLC HSBA, -0.44% HSBC, -0.38%  fell 0.5%. Royal Bank of Scotland Group PLC RBS, -0.63%  was off 0.6%. RBS was upgraded to a buy rating from neutral on Friday at UBS, which said in part that RBS’s stock hasn’t tracked positive per-share earnings revisions.

Among retailers, apparel seller Next PLC NXT, -0.97%  fell 1.2% and department store operator Marks & Spencer Group PLC MKS, -0.62%  gave up 0.9% but Debenhams PLC DEB, +1.30% rose 2.2% off the FTSE 100 as Mike Ashley holds a stake in that department store.

Ryanair Holdings PLC shares RYA, -2.15%  fell 2.6% as the airline said it plans to operate 85% of its schedule Friday as pilots in five European countries take strike action. That is the fifth strike action since July 12.

Diageo PLC DGE, -0.23%  was off by 0.2%, even after the maker of Gordon’s Gin and Smirnoff vodka said it would start buying back up to 1.4 billion pounds ($1.79 billion) of its shares until Jan. 31.

Economic data

The U.K. economy expanded at a rate of 0.4% in the three months to June, bolstered by construction and services activity, a faster rate than 0.2% in the first quarter of 2018. The economy expanded at an annualized rate of 1.5% in the second quarter, the Office for National Statistics said Friday, faster than the 0.9% rate in the first quarter.

Providing critical information for the U.S. trading day. Subscribe to MarketWatch’s free Need to Know newsletter. Sign up here.

Be Sociable, Share!

Related Posts

 

MarketTamer is not an investment advisor and is not registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory Authority. Further, owners, employees, agents or representatives of MarketTamer are not acting as investment advisors and might not be registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory.


This company makes no representations or warranties concerning the products, practices or procedures of any company or entity mentioned or recommended in this email, and makes no representations or warranties concerning said company or entity’s compliance with applicable laws and regulations, including, but not limited to, regulations promulgated by the SEC or the CFTC. The sender of this email may receive a portion of the proceeds from the sale of any products or services offered by a company or entity mentioned or recommended in this email. The recipient of this email assumes responsibility for conducting its own due diligence on the aforementioned company or entity and assumes full responsibility, and releases the sender from liability, for any purchase or order made from any company or entity mentioned or recommended in this email.


The content on any of MarketTamer websites, products or communication is for educational purposes only. Nothing in its products, services, or communications shall be construed as a solicitation and/or recommendation to buy or sell a security. Trading stocks, options and other securities involves risk. The risk of loss in trading securities can be substantial. The risk involved with trading stocks, options and other securities is not suitable for all investors. Prior to buying or selling an option, an investor must evaluate his/her own personal financial situation and consider all relevant risk factors. See: Characteristics and Risks of Standardized Options. The www.MarketTamer.com educational training program and software services are provided to improve financial understanding.


The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.