The FTSE plummets under the effect of the strong pound, while other European global markets collapse – Business News

LONDON: UK stocks fell sharply on Thursday as the pound sterling rose after the European Commission and Britain agreed on a draft text for future EU-UK relations after Brexit, with Centrica, Fresnillo and other mining titles in mind.

Some of the biggest slaughterers – Vodafone , Imperial Marks , DCC National grid and Evraz – ex-dividend, taking about 9.8 points of the index.

The FTSE 100 closed down 1.3%, deferring the gains from the previous session and the underperformance of its euro-zone counterparts, while the pound sterling surged because of the positive news from Brussels in mid-morning.

Britain and the European Union have agreed in principle to a text defining their future relations, which can be approved by European leaders at a summit on Sunday. The deal allowed the pound to climb up to 1%, thanks to the relief of prolonged and tense negotiations.

"Brexit's growing optimism has contributed to the Pound's rise and the FTSE 100's decline, with a series of positive announcements contributing to increased optimism," said Joshua Mahony, Analyst. market at IG.

The UK's major export stocks index, the heavily-traded, was on track to record a second consecutive straight loss amid lingering concerns about the impact of Brexit on the street, the company said. Economy and banks.

The FTSE 250 <.FTMC> was down 0.3 percent. With the closure of US markets, volumes were below normal.

Energy, mining and consumer staples accounted for more than half of the losses.

Fresnillo was the biggest bankrupt, down 12.1% for its biggest one-day drop in two years, after Morgan Stanley downgraded its stock, fearing the company would do business in Mexico much more difficult after the adoption of recent legislation.

Utilities also targeted after Centrica profits and Severn Trent .

Centrica hit March lows for its worst day in a year after the loss of customers, the decline in nuclear power generation and a drop in production at its oil and gas division. Severn Trent fell 0.9 percent after his results.

Among the mid-caps, Rotork investors focused on the drop in its third quarter backlog, rather than on a set of online results. Investec analysts say equities seem overvalued by their earnings prospects.

Hill & Smith rose 3.3% to reach its highest level since August after confirming its earnings outlook for the year, with underlying organic revenue growth of 3% in the third quarter and healthy activity after the first quarter. difficult quarter.

"The third quarter update is reassuringly online, confirming the company's good results since the first quarter weather problems," said Peel Hunt's analysts.

Meanwhile:

European equity markets fell back into the red on Thursday, as investors worried about slowing global growth in the face of rising US interest rates and trade tensions surpassing crucial Brexit developments.

Chinese markets had prolonged their slump in Asia after the trade war with the United States. With Wall Street closed for Thanksgiving and trade lighter than normal, Europe has followed suit.

The area also had a lot to do.

Corporate profits were disappointing, but Italian bonds rallied for the second day as fighting continued above budget and sterling jumped when London and Brussels agreed on an agreement on the Brexit transition. [.EU] [GVD/EUR]

The dollar <.DXY> Traders also sold their greenback for Thanksgiving and after Wall Street saw Apple's shares , which have fallen by $ 280 billion in recent weeks, fail with a rebound attempt. [.N][/FRX]

"I think the recent developments in equities have basically been to get big techs to catch up with the rest of the market," said Eoin Murray, chief investment officer at Hermes Investment Management.

"After the (global market) wobble at the end of January, it's really only the big technology that has sank into the stratosphere … So it's just a big technology coming back to earth."

The European technology sector lost another 0.75%, but it was not the worst. Banks lost up to 1.6% and mining companies and other resource companies fell by nearly 2% <.SXPP> before recovering land. [.EU]

The falls also reflected the fierce trade war between Canada and the United States, encouraging investors to withdraw money before US President Donald Trump and his Chinese counterpart, Xi Jinping, meet in Argentina next week.

The objective is to know if they can progress in their commercial dispute.

The G20 group of the world's largest economies implemented 40 new trade restrictive measures between mid-May and mid-October, for a trade volume of nearly $ 481 billion. announced Thursday the World Trade Organization.

Three-quarters of the restrictions were tariff increases, many of which were retaliation against the steel and aluminum tariffs imposed by US President Donald Trump in March.

But the WTO has not taken into account the measures announced since or not yet implemented, and a G20 country has asked that its actions be omitted from the follow-up report, said the report. ; WTO.

RUSH FOR BREXIT

In the absence of American trading to look forward to, traders are content to watch the European drama of Brexit unfold.

Sterling went back to $ 1.29 and 88.50 pence for one euro after London and Brussels have agreed on a text outlining their relations after the split, that EU leaders should approve at a summit on Sunday.

A little more than four months before Britain's departure from the European Union, Brexit negotiations and political uncertainty in Britain remain the main drivers of the sterling, and many analysts worry about its prospects.

"While the UK and the European Union are rushing to negotiate an agreement on Brexit, the pound sterling currently enjoys some support and upward pressure on the front of the rate market, "said Kit Juckes, Société Générale's strategist.

"Although we will not be long in refocusing on the Prime Minister's challenge to get the support of the House of Commons for his agreement on Brexit," he added.

Simon Fraser, the former permanent secretary of the British Foreign Ministry, said he was expecting British politicians to vote on the agreement reached on December 10th.

"Huge pressures would be exerted on members of parliament and I think there's a reasonable chance that she's going through that … if it's not during the first vote, potentially when it's over." 39, a second vote, "he told an appeal organized by the Amundi fund manager.

OIL OILS

The Brexit text also saw the euro appreciating against the dollar, which meant that the single currency had barely moved that the minutes of the ECB meeting showed that its politicians were keen to confirm their plans to reduce stimulus measures by the end of the year.

The South African central bank, however, triggered a lot more actions, while a tight decision to raise the interest rate in a meeting difficult to summon had already pushed up its currency, the rand, more than 1%.

Back in the emerging equity markets, the broader equity index of the Asia-Pacific MSCI outside Japan <.MIAPJ0000PUS> had ended little changed after recovering from an initial flicker.

The index has managed to hold its ground so far in November after three consecutive monthly declines, but is on the brink of its worst annual performance since 2011.

Nikkei from Japan <.N225> had ended almost up 0.7%, but fears over current trade and technology led Chinese equities to close 0.4% in the red. <.CSI300> [.SS]

"Investors are still wary of knowing they will see new lows, because none of the problems at the root of the recent correction has dissipated," said Shane Oliver, head of strategy investment at AMP in Sydney.

In commodities, China-sensitive metals, such as copper, fell [MET/L] and oil prices reversed, even though they were still above their record lows earlier this week. [O/R]

American brut Prices for the future were down 42 cents to 54.21 dollars a barrel after hitting a record low in a year, 52.77 dollars Tuesday. Brent fell 45 cents to $ 63.03, from Tuesday's low of $ 61.71.

Pink gold, with spot prices at $ 1,227.60 on-Reuters.