LONDON MARKETS: FTSE 100 Extends Trump-spurred Drop Ahead Of Retail Sales Report

By Carla Mozee, MarketWatch Features Dow Jones Newswires

Retail sales expected to rebound in April

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U.K. stocks fell Thursday, extending losses from Wednesday's selloff prompted by worries that U.S. President Donald Trump's administration won't be able to push through his pro-growth agenda.

The FTSE 100 index fell 0.7% to 7,450.57, led by the basic materials, industrial and financial sectors. The index on Wednesday fell 0.3% (http://www.marketwatch.com/story/ftse-100-steady-ahead-of-jobs-data-but-trump-worries-limit-gains-2017-05-17), the first loss in 10 sessions and a retreat from its record close of 7,522.03 logged on Tuesday (http://www.marketwatch.com/story/ftse-100-clings-onto-record-high-ahead-of-inflation-report-2017-05-16).

European stocks declined 0.6% Thursday. Wednesday's session on Wall Street (http://www.marketwatch.com/story/us-stock-futures-slide-as-concerns-over-trump-grow-2017-05-17) triggered the worst sessions since Sept. 9 for the S&P 500 index and the Dow Jones Industrial Average , tumbled 372.82 points.

The selloff followed a New York Times report that Trump in February asked then-director of the Federal Bureau of Investigation, James Comey, to stop his investigation into links between Trump's associates and Russian officials.

"Realistic discussions of impeachment are now being had and markets are rightly concerned that this is another significant spanner in the works for Trump's legislative plans," said Richard Perry, market analyst at Hantec Markets, in a not. "If he struggled with health care reform how is he going to get through controversial plans over huge fiscal stimulus, banking reform and deregulation?"

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Banks shares worldwide had booked gains on the prospect of looser regulatory rules. A slide in shares of financial companies on Wednesday led the overall market's decline. Among the decliners, Bank of America Corp. (BAC) slumped 6%.

In London, shares of Barclays PLC (BCS) fell 1% and HSBC Holdings PLC (HSBA.LN) (HSBA.LN) shed 0.4%.

Questions also rose about the feasibility of infrastructure plans touted by Trump and the continuation of an accompanying reflation trade. That hurt shares of metals producers, with Antofagasta PLC (ANTO.LN) off 2.7% and Anglo American PLC (AAL.LN) down 2%.

But there's "a potential calming impact with the appointment of former FBI Director Robert Mueller as a special counsel for the Russia investigation," said Perry. "Global equities are still under pressure, but are they set for a bounce too as the bargain hunters move in?"

Stock movers: Burberry Group PLC (BRBY.LN) rose 1.8% as the luxury-goods retailer said it was on target with its cost-savings program (http://www.marketwatch.com/story/burberry-pretax-profit-below-forecasts-2017-05-18) and backed its current-year forecasts. Full-year profit fell 5%, below its previous guidance.

Royal Mail PLC (RMG.LN) climbed 3.1% as the company posted a 25% rise in fiscal 2017 pretax profit. (http://www.marketwatch.com/story/royal-mail-pretax-profit-rises-25-2017-05-18)

Data: At 9:30 a.m., the Office for National Statistics is scheduled to release its April report on retail sales. Sales are expected to rise 1.2%, with aid from the Easter holiday. In March, sales sank 1.8% as consumers reined in spending as prices rose (http://www.marketwatch.com/story/uk-retail-sales-fall-sharply-in-march-2017-04-21).

This week, data has shown regular wages rose 2.1% in the three months to March. But adjusted for inflation, they fell 0.2%. Meanwhile, headline inflation has climbed to 2.7%.

The pound was buying $1.2969 ahead of the report, not far off from $1.2971 late Wednesday in New York.

(END) Dow Jones Newswires

May 18, 2017 04:18 ET (08:18 GMT)