U.K. house prices reverse declines with 1.1% rise
U.K. blue-chip stocks dropped Wednesday, under pressure from a strengthening pound and from losses for the key oil sector.
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The FTSE 100 was down 0.5% to 7,399.99. The consumer services sector was the only one higher, while the oil and gas and tech groups led decliners. The London benchmark on Tuesday fell 0.2% (http://www.marketwatch.com/story/ftse-100-falls-as-profit-warning-puts-retailers-under-pressure-2017-06-27), its fifth loss in six sessions.
On Wednesday, Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) declined 1.1% and BP PLC (BP.LN) (BP.LN) gave up 0.8%. Shares in those energy majors were moving lower in step with a drop in oil prices .
Crude prices slid roughly 1% Wednesday, after the American Petroleum Institute on Tuesday reported an unexpected weekly rise of 851,000 barrels in U.S. crude supplies (http://www.marketwatch.com/story/oil-prices-fall-as-sources-say-api-data-show-an-unexpected-rise-in-us-crude-supply-2017-06-27). Supply data from the Energy Information Administration is scheduled for release Wednesday at 10:30 a.m. Eastern Time.
Oil stocks have a roughly 14% weighting on the FTSE 100, according to FactSet data.
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)
Meanwhile, the pound was trading steady at $1.2814. It leapt above $1.28 on Tuesday for the first time in more than a week, after comments from Bank of England Governor Mark Carney. A higher value for the currency can hurt earnings made overseas by multinational companies on the FTSE 100.
"The Bank of England Governor Mark Carney convinced buyers to return to the pound as he announced macro-prudential measures aiming to bring the U.K.'s inflation down to the 2% policy target," said Ipek Ozkardeskaya, senior market analyst at London Capital Group, in a note.
"In this regard, the BoE will increase capital requirements for the U.K. banks and maintain the consumer credit growth under control. The macro-prudential measures should help the BoE taking control over the U.K.'s inflation and keeping the interest rates low through an eventually rough Brexit period."
Bank shares on the FTSE 100 were mostly lower Wednesday. HSBC Holdings PLC (HSBA.LN) fell 0.6%, Lloyds Banking Group PLC (LLOY.LN) (LLOY.LN) shed 0.5%, and Barclays PLC (BCS) lost 0.2%. But Standard Chartered PLC (STAN.LN) tacked on 0.1%.
Read:Bank of England orders banks to boost capital (http://www.marketwatch.com/story/bank-of-england-orders-banks-to-boost-capital-2017-06-27-5485570)
U.K. and European stocks also keyed off losses on Wall Street on Tuesday, where the major indexes slid (http://www.marketwatch.com/story/wall-street-stocks-on-track-to-slip-hurt-again-by-a-drop-for-techs-2017-06-27) after U.S. lawmakers delayed a vote on health care legislation. The move resurfaced doubts about whether the Trump Administration can deliver the tax cuts and spending that investors worldwide have been awaiting.
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, said Nationwide Building Society.
(END) Dow Jones Newswires
June 28, 2017 04:10 ET (08:10 GMT)