Investors brace for a potentially eventful weekend
U.K. stocks slipped Friday as the pound continued to rise, with mining shares under pressure as the market headed for weekly loss.
The FTSE 100 shed 0.3% to 7,377.47, with only the financial group gaining ground. On Thursday, the London benchmark climbed 0.6% (http://www.marketwatch.com/story/uk-stocks-search-for-firm-direction-as-banks-fall-insurers-rise-2017-09-07), breaking a three-day losing run.
After that losing streak, the blue-chip index is on course to fall 0.7% for the week. That would be the first decline in four weeks.
Recent sessions have been marked by nerves over North Korea’s nuclear strike ambitions and the impact of Hurricane Irma. On Friday, investors appeared to be stepping out of assets perceived as more risky ahead of what could be an eventful weekend. Pyongyang may launch another missile (http://www.marketwatch.com/story/north-korea-is-getting-ready-for-another-possible-icbm-launch-says-south-korea-2017-09-04) on Saturday as it celebrates the country’s Foundation Day, while Irma is forecasted to make landfall in Florida late Saturday or early Sunday.
Read:Investors are in denial about the rising risk of war with North Korea (http://www.marketwatch.com/story/investors-are-in-denial-about-the-rising-risk-of-war-with-north-korea-2017-09-07)
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Sterling strength: On Friday, the pound continued to rise, buying $1.3145, up from $1.3102 late Thursday in New York. Sterling has risen roughly 1.5% against the dollar this week, and pound strength can hurt revenue and earnings prospects for multinational companies.
Miners lose ground: Mining shares sagged after growth in Chinese exports slowed in August, to a rate of 5.5%, raising concern about softening of global demand. Mining shares can be sensitive to Chinese economic data as the world’s second-largest economy is a key buyer of industrial and precious metals.
In the group, shares of copper producer Antofagasta PLC (ANTO.LN) fell 1.2% and BHP Billiton PLC (BLT.LN) fell 1%.
Stock movers: Retailers were losing ground, with Marks & Spencer PLC (MKS.LN) off 2.2%, Kingfisher PLC (KGF.LN) dropped 2.3%, and Next PLC (NXT.LN) gave up 1%.
Consumers flag: Off the main benchmark, on the FTSE 250, shares in Greene King PLC (GNK.LN) tumbled 12% after the brewer warned of tougher trading conditions. It flagged a drop in confidence in the economy as wages stagnate.
“We remain cautious about the trading environment and expect the challenges of weaker consumer confidence, increased costs and increasing competition to persist over the near term.”
It blamed wet weather for a drop in sales, especially in its “value food” business.
Shares in Whitbread PLC (WTB.LN) , which operates pub food chain Brewers Fayre, fell 1.6%.
Economy in focus: Manufacturing production in the U.K. rose 0.5% in July, the Office for National Statistics said, beating expectations for a 0.3% gain. Industrial production was up 0.2%, meeting views. However, construction output for the same month was down 0.9%.
Earlier, the British Chambers of Commerce cut its U.K. economic growth view for 2018 adn 2019, noting that the fall in the pound since the Brexit referendum had not translated into a boost for businesses.
“While some businesses report strong trading conditions, the U.K. economy as a whole is treading water, and there is no sign on the horizon of a return to healthier levels of growth,” said BCC Director General Adam Marshall in a statement.
It reduced its growth expectations for next year and 2019 to 1.3% and 1.2%, from 1.5% and 1.4% previously forecast. But it upgraded its projection for 2017 to 1.6%, driven by a moderately stronger outlook for consumer spending growth.
(END) Dow Jones Newswires
September 08, 2017 04:58 ET (08:58 GMT)