LONDON MARKETS: FTSE 100 Steady Ahead Of Jobs Data, But Trump Concerns Limit Gains

By Carla Mozee, MarketWatch Features Dow Jones Newswires

U.K. government completes sale of Lloyds shares

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U.K. blue-chip stocks wavered Wednesday, even as U.S. stock futures and a broad European index lost ground on concerns about President Donald Trump's ability to push through reforms investors have been wanting.

Asian stocks also fell after The New York Times reported that Trump asked former Federal Bureau of Investigation Director James Comey to stop his investigation into former National Security Adviser Michael Flynn (http://www.marketwatch.com/story/us-stock-futures-under-pressure-amid-fresh-concerns-over-trump-2017-05-17). The report cited a memo from Comey.

The FTSE 100 index turned up by less than 1 point to 7,524.70 but flicked in and out of positive territory after opening down about 0.4%. Industrial and financial shares were losing the most, while consumer-related and basic material stocks were higher. Across the continent, the Stoxx Europe 600 index was down 0.4%.

"Talks around the FBI and Russia keep the risk appetite limited and the U.S. political agenda on the backstage," said London Capital Group's senior market analyst Ipek Ozkardeskaya, noting the U.S. Dollar Index has fallen back to levels last seen around November's U.S. presidential election.

Infrastructure and bank shares worldwide have been among those that have gained on the prospect the Trump administration would boost infrastructure spending, push tax cuts and reforms through Congress and relax regulatory rules for the financial sector.

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In London, shares of banking heavyweight HSBC PLC (HSBA.LN) (HSBA.LN) fell 0.5% and engineering company Rolls-Royce Holdings PLC (RR.LN) declined 1%.

"The government's inability to expand the fiscal policy at the pace promised by Trump, automatically reduces the inflation expectations and gives the Fed more time for normalizing its rates and its balance sheet," said Ozkardeskaya.

The FTSE 100 on Tuesday finished above 7,500 for the first time (http://www.marketwatch.com/story/ftse-100-clings-onto-record-high-ahead-of-inflation-report-2017-05-16).

Data: The pound was buying $1.2932, up from $1.2915 late Tuesday in New York, before the Office for National Statistics releases its jobs report for March at 9:30 a.m. London time, or 4:30 a.m. Eastern Time.

That data includes wage growth, which is closely watched by the Bank of England. Earnings including bonuses are expected to rise 2.4% in the three months to March, and by 2.2% excluding bonuses.

But at those levels, wages would be outstripped by the 2.7% headline inflation rate released Tuesday. (http://www.marketwatch.com/story/uk-inflation-rate-at-fastest-since-2013-2017-05-16)

Read:The pound faces these hurdles as it battles to reclaim $1.30 (http://www.marketwatch.com/story/the-pound-faces-these-hurdles-as-it-battles-to-reclaim-130-2017-05-16)

Stock movers: Lloyds Banking Group PLC (LLOY.LN) (LLOY.LN) was up 1%. The lender is back in private ownership after the U.K. government sold its remaining shares in the company (http://www.marketwatch.com/story/lloyds-bank-returns-to-private-ownership-2017-05-17). The government bailed out Lloyds during the financial crisis.

(END) Dow Jones Newswires

May 17, 2017 04:19 ET (08:19 GMT)