LONDON MARKETS: U.K. Stocks Drop For 4th Day, Under Pressure From Pound's Rally

By Sara Sjolin, MarketWatch Features Dow Jones Newswires

Sterling on track for best week since June after BOE signals a rate hike is coming

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U.K. stocks fell for a fourth straight session on Friday, pressured by a continued rally in the pound and a renewal of geopolitical jitters after North Korea fired a missile over Japan.

The FTSE 100 index lost 0.4% to 7,268.45, setting it on track for its lowest close since early May, according to FactSet figures. For the week, the blue-chip benchmark was on track for a 1.5% drop.

Meanwhile, the pound continued to rise after its Bank of England-fueled rally on Thursday, buying $1.3430, compared with $1.3398 late Thursday in New York. Sterling started to move sharply higher in Thursday's session after the BOE signaled it was preparing to raise interest rates (http://www.marketwatch.com/story/boe-says-it-may-hike-interest-rates-within-months-2017-09-14) over the coming months to rein in rising inflation.

"For sterling, the message was clear, tightening is coming and the market is underestimating this fact. But we have heard this song over and over again," said Naeem Aslam, chief market analyst at Think Markets UK.

"However, something has changed, and the market has started to price that in," he said a note.

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A higher U.K. currency tends to slam the FTSE 100 lower, as it impacts the earnings of the index's many multinational companies that make a bulk of their earnings overseas. For the week, the pound was set for a 1.8% jump, its biggest weekly jump since late June.

Traders on Friday were also spooked by the latest provocation from North Korea. The isolated regime early Friday local time fired a missile over northern Japan (http://www.marketwatch.com/story/un-security-council-to-hold-emergency-meeting-after-latest-north-korean-missile-test-2017-09-14) for the second time in a month, a day after saying it wanted to sink the country with a nuclear bomb.

Stock movers: Miners were among biggest decliners, building on losses from Thursday that came after some disappointing Chinese data (http://www.marketwatch.com/story/chinas-industrial-output-grows-less-than-expected-2017-09-14).

Shares of Rio Tinto PLC (RIO) (RIO) (RIO) lost 1.3%, Anglo American PLC (AAL.LN) gave up 1.8%, and Glencore PLC (GLEN.LN) fell 1.6%.

Off the blue-chip index, shares of J.D. Wetherspoon PLC (JDW.LN) rose 9.1% after the U.K. pub operator reported a rise in profit (http://www.marketwatch.com/story/wetherspoon-profit-rises-maintains-dividend-2017-09-15) and maintained its full-year dividend.

(END) Dow Jones Newswires

September 15, 2017 04:24 ET (08:24 GMT)