LONDON MARKETS: U.K. Stocks Swept Lower As Home Builders, Insurers Come Under Pressure

By Carla Mozee, MarketWatch Features Dow Jones Newswires

U.K. stocks fell Wednesday, keying off a selloff on Wall Street as tensions with North Korea persisted and Hurricane Irma headed toward the U.S.

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The FTSE 100 fell 0.4% to 7,340.19, led by financial and industrials shares. A loss Wednesday would be the London benchmark's third in a row. The index on Tuesday fell 0.5% (http://www.marketwatch.com/story/ftse-100-gains-traction-as-mining-shares-advance-2017-09-05), hurt by geopolitical worries and a jump in the pound to a three-week high above $1.30.

"The North Korean nuclear crisis returned to the forefront of investors' minds this Wednesday, with yesterday's Dow Jones [Industrial Average] plunge and a jittery Asian session overnight leading the European indices into the red," said Connor Campbell, financial analyst at Spreadex.

U.S. stocks closed firmly lower (http://www.marketwatch.com/story/wall-street-stocks-set-for-downbeat-open-as-north-korea-standoff-intensifies-2017-09-05) on Wednesday, with the Dow Jones Industrial Average down 234 points and the S&P 500 Index off nearly 1%. In Asia, Japan's Nikkei at one point hit a four-month low (http://www.marketwatch.com/story/nikkei-hits-4-month-low-as-asian-markets-continue-selloff-2017-09-05). Stocks dropped after Pyongyang said it had successfully tested its largest-ever nuclear bomb, heightening tensions between North Korea and its U.S. allies.

"South Korea's president Moon Jae-in stated that the situation was becoming 'uncontrollable', while North Korea's UN ambassador Han Tae Song claimed the U.S. can expect to receive more nuclear test 'gift packages'. Add onto this the threat of Hurricane Irma ... and there was little reason for market cheer," Campbell said.

Campbell also flagged the drop in shares of home builders Barratt Developments PLC (BDEV.LN) and Berkeley Group Holdings PLC (BKG.LN) after they issued trading updates.

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Irma hits insurers: Wednesday's session got underway with Hurricane Irma, described as a potentially catastrophic Category 5 storm in the Atlantic Ocean, hitting islands in the Caribbean and heading toward the Virgin Islands, Puerto Rico and Florida.

In London, shares of insurer Prudential PLC (PRU.LN) dropped 1.3%. Irma follows Hurricane Harvey, which recently flooded Houston and caused oil refineries in the U.S. Gulf Coast to be shut down.

On the FTSE 250, shares of insurer Beazley PLC (BEZ.LN) were down 3%, Hiscox Ltd. (HSX.LN) lost 1%, and Lancashire Holdings Ltd. (LRE.LN) shed 0.5%.

Home builders: Back on the FTSE 100, Berkeley Group (BKG.LN) fell 2.7% as the home builder said the London market continued to be adversely impacted by Brexit uncertainty (http://www.marketwatch.com/story/berkeley-london-market-hurt-by-brexit-uncertainty-2017-09-06) and changes to stamp-duty land tax.

Barratt (BDEV.LN) lost 3.2% even the home builder said it will return 175 million pounds ($226 million) to shareholders (http://www.marketwatch.com/story/barratt-sets-special-dividend-after-profit-rise-2017-09-06) in the form of a special dividend as a result of strong fiscal 2017 earnings.

Stock movers: In the banking group, Standard Chartered PLC (STAN.LN) were 2.3% lower and Royal Bank of Scotland PLC (RBS.LN) (RBS.LN) shed 1%. The decline for banks started Tuesday after Federal Reserve Governor Lael Brainard said the central bank may need to slow down (http://www.marketwatch.com/story/fed-may-have-to-slow-interest-rate-hikes-given-subdued-inflation-brainard-2017-09-05) interest-rate hikes.

Meanwhile, the pound bought $1.3023, compared with $1.3033 on Tuesday. A strong pound can hurt revenue and earnings made overseas by U.K.-listed multinational companies.

(END) Dow Jones Newswires

September 06, 2017 04:25 ET (08:25 GMT)