LONDON MARKETS : FTSE 100 Slips As The Pound Hits 3-week High
By Carla Mozee, MarketWatch
But blue-chip index still above 2,400, after reaching record closes last week
U.K. stocks declined Monday, as a rise in the pound to a three-week high weighed on the FTSE 100, which twice hit record levels last week.
The FTSE 100 fell 0.2% to 7,411.20, with oil and gas, health care and financial shares among those losing ground. On Friday, the London benchmark added 0.1% to 7,424.96, a new record closing high. That was the index's second close at a record in a row, and those moves helped the blue-chip gauge gain 1.1% for the week.
This week started with the pound buying $1.2415, up from $1.2397 late Friday in New York. That is the highest level for the pound since Feb. 27, when it hit $1.244, according to FactSet.
Blue-chip stocks tend to rise when the pound falls, as it boosts the prospects of stronger earnings and sales for multinationals that trade overseas.
The "pound is caught between last week's dovish [rate] hike from the Fed, the Bank of England's non-unanimous rate vote, where Kristen Forbes signaled that she believes an increase is in order, and Tuesday's inflation figure, which is set to cross the BOE's long-held 2% target," said Connor Campbell, financial analyst at Spreadex.
"The FTSE didn't respond particularly well to this movement," although it's still hovering near 7,400, he added in his note.
G-20 fallout: There was also gloom over the equity market following the weekend's Group of 20 meeting of finance ministers and central bankers in Baden-Baden, Germany.
The "G-20 meeting revived worries about the U.S.'s trade protectionism as finance chiefs were brought to drop a reference to fight protectionism in their joint statement," said Ipek Ozkardeskaya, senior market analyst at London Capital Group, in a note.
"Several leaders were left frustrated with the U.S.'s position regarding the global trade under Trump administration, including China, Japan, Russia, Germany and France," she said.
Stocks in focus: Vodafone Group PLC (>> Vodafone Group plc) reached a deal to merge most of its Indian operations with Idea Cellular Ltd . (532822.BY), the country's third-largest mobile operator. Shares of Vodafone were fractionally higher.
Unilever PLC (>> Unilever plc) is looking at a GBP6 billion sale of its spreads business, which includes the Flora and Stork brands, according to a Sunday Times report (http://www.thetimes.co.uk/article/unilever-lines-up-6bn-sale-of-flora-and-stork-87bxxlnd2).. Shares were up 0.2%.