U.K. house prices reverse declines with 1.1% rise
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U.K. blue-chip stocks finished with losses Wednesday, hit by a surge in the pound and as shares in asset managers weighed on the index in the wake of new rules for the industry.
The FTSE 100 fell 0.6% to end at 7,387.80, enduring its sixth loss in seven sessions. The London benchmark suffered its lowest close since May 11, according to FactSet data.
The pound was trading at $1.2940, up significantly from $1.2814 late Tuesday in New York, after Bank of England Gov. Mark Carney said interest rates may have to go up (https://www.wsj.com/articles/boes-carney-some-removal-of-stimulus-may-be-necessary-if-economy-improves-1498658542) if the U.K. economy continues to show strength despite soft consumer spending.
Stronger sterling tends to weigh on the FTSE 100, as a higher value for the currency reduces the revenue generated overseas by the index's multinational companies.
"Mark Carney, everyone's favourite dovish BOE governor, suddenly declared that the bank might need to raise rates," said Chris Beauchamp, chief market analyst at IG, in a note.
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"As a result, the pound surged above $1.29 for the first time since its election night drubbing, and this prompted the FTSE 100 to drop back to the lows of the day," Beauchamp added, referring to the currency's fall following a parliamentary vote in early June.
Meanwhile, Hargreaves Lansdown PLC (HL.LN) and Scottish Mortgage Investment Trust PLC (SMT.LN) gave up 2.3% and 2%, respectively, after the U.K.'s top financial watchdog laid out tough new rules for asset managers (http://www.marketwatch.com/story/uk-watchdog-lays-out-tough-new-rules-for-asset-managers-2017-06-28). They were among the FTSE's biggest losers.
Read:Invest in these European underperformers now, before Daniel Loeb does (http://www.marketwatch.com/story/invest-in-these-european-underperformers-now-before-daniel-loeb-does-2017-06-28)
But commodities-related stocks helped limit losses, as oil and metals prices traded higher. Miners Antofagasta PLC (ANTO.LN) and BHP Billiton PLC (BLT.LN) closed higher by 1.7% and 0.9%, respectively.
Economic data:U.K. house prices rose 1.1% in June, (http://www.marketwatch.com/story/uk-house-prices-rise-11-reversing-declines-2017-06-28) reversing three consecutive months of decline, according to Nationwide Building Society.
Check out:Paddington Bear's important lesson for stock-market investors (http://www.marketwatch.com/story/paddington-bears-important-lesson-for-stock-market-investors-2017-06-28)
(END) Dow Jones Newswires
June 28, 2017 12:46 ET (16:46 GMT)