news-details

The U.K.’s main stock index closed higher for a fourth session in a row Wednesday as the benchmark scored a boost from a weaker currency amid lingering concerns about the country’s exit from Europe’s trade bloc.

Worries about so-called Brexit have persistently weighed on the pound and investors’ psyche. However, sterling weakness has given some lift to companies doing business abroad.

How are markets performing

The FTSE 100 UKX, +0.75% rose 0.8% at 7,776.65, after rising 0.7% in the previous session. The British equity gauge’s fourth straight gain pushed it to the highest close since May 24, according to FactSet data.

The British pound GBPUSD, -0.4096%  dropped to a level not seen since August last year. Sterling last bought $1.2874, down from $1.2938 late Tuesday in New York.

The British blue-chip gauge is up about 1.3% so far this week, which would mark its best weekly gain since the period ended May 11.

A weaker currency can help the sale and revenue of British companies that do business abroad.

What’s moving markets

Comments from trade minister Liam Fox over the weekend had sparked fresh worries about Brexit, after the official put the chance of a so-called “hard Brexit” at 60%, with no plan outlining the future relationship between the kingdom and the EU.

Meanwhile, on Tuesday, the U.S. completed a list of $16 billion in Chinese imports that will be subject to 25% tariffs. That brings bring duties on Chinese imports, which are set to take effect Aug. 23, to $50 billion. And U.S. officials have said they are considering duties on $200 billion more.

Investors fear that an intensifying clash between the two largest economies in the world will rattled economies across the globe. Investors, however, have focused on the health of the U.K. economy which appears healthy.

Stocks in focus

Decliners:

Shares of Paddy Power Betfair PLC PPB, -7.14%  finished the session down 7.1% after the betting company cut its 2018 view in results out Wednesday.

Glencore PLC’s stock GLEN, +0.08% gained less than 0.1%. The Swiss mining-and-trading giant posted record first-half results, but missed on pretax earnings.

Gainers:

Shares of Prudential PLC PRU, +3.67%  rose 2.6%, after the insurer reported a 9% rise in interim operating profit, boosted by Asian growth.

Heavyweight banking group HSBC Holdings PLC HSBC, +0.95%  rose 1%, while Standard Life Aberdeen PLC SLA, +3.17%  shares added 1.9%.

Hargreaves Lansdown PLC’s stock HL., +2.17%  rose 3.2%.

Don’t miss: A top London startup’s CEO flags the biggest Brexit threat to his industry

What are strategists saying?

“Concerns of a potential hard Brexit scenario have haunted investor attraction towards the pound and have left the currency vulnerable to downside shocks,” wrote Lukman Otunuga, research analyst at FXTM, in a Wednesday note.

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

Related Posts