LONDON: London’s stock market sank Wednesday on a stronger pound and weaker oil prices, bucking the upwards trend in Europe despite more record gains on Wall Street.
Bitcoin hogged the headlines after the controversial virtual currency, which is not traded on world markets, smashed its way to historic peaks above $10,000 on a wave of feverish speculation.
London’s energy sector was hurt by sliding crude prices on the eve of a scheduled Vienna output meeting of OPEC, the oil producers’ cartel.
Lower oil prices bites into profits and revenues of energy companies like BP and Shell, whose shares dropped about 1.5 percent in value.
The pound meanwhile rallied on reports that Britain will pay up to 55 billion euros ($65 billion) to leave the European Union, putting pressure on British negotiators before key talks in Brussels.
Sterling jumped briefly to a two-month peak at $1.3431, but lost ground after EU chief negotiator Michel Barnier refused to confirm the reports and called them “rumours”. He later said the negotiations are not over.
The stronger pound weighs heavily on the share prices of multi-national firms and tends to drag the FTSE lower.
Conversely, the weaker European single currency was a boon for eurozone stock markets, sending Frankfurt and Paris fizzing higher, dealers said.
“The main drag on the FTSE100 is the oil and gas sector ahead of tomorrow’s OPEC meeting and today’s weakness in oil prices, along with the strong pound which is acting as an anchor around the legs of the FTSE,” CMC Markes analyst Michael Hewson told AFP.
“The corresponding weakness in the euro, on the other hand, is giving a fairly decent bid to European equities.”
In company news, the London Stock Exchange Group announced the exit of chief executive Xavier Rolet, bringing forward a planned departure after blaming ‘unwelcome publicity’ surrounding talk that he had been forced to step down.
LSEG shares declined 2.0 percent to 3,724 pence.
Asia markets diverged Wednesday as investors brushed off early worries about North Korea’s latest missile test.
Caution also prevailed, despite fresh records on Wall Street, as Donald Trump’s tax-cut plans moved a step closer.
New York traders cheered a forecast-beating US consumer confidence survey and news that a key Senate committee agreed to a fiscal overhaul plan late Tuesday, fuelling a rally to new records on the city’s three main indexes.
Source: Brecorder.com
