Pound slips below $1.28
U.K. stocks ended a choppy session little changed on Wednesday as a falling pound buoyed exporters, but the benchmark index still struggled to shake off a downbeat trend in European equities.
The FTSE 100 rose 0.91 point, or 0.01% to close at 7,382.65 after having opened in the red.
The FTSE 100 trudged slightly higher as the pound dipped below $1.28. Sterling also struggled against euro , visiting levels not seen since October 2009. Pound strength tends to weigh on shares of London-listed multinational companies with earnings in other currencies.
"The pound is weakening against the euro with the strong [eurozone] manufacturing PMI prints," said Henry Croft, research analyst at Accendo Markets.
As well, it appears "the Brexit position from the U.K. government is softening a little bit and ... that might mean we're not able to get some of the terms that had been set out by Theresa May in January, and she was pretty strong about that," Croft said. "We could end up not getting the concessions the government wanted in the first place and it's time to step back and re-evaluate the situation."
The pound traded hands at $1.2784, down from $1.2823 late Tuesday in New York. Against the shared currency, sterling fell to EUR1.0831 from EUR1.0903.
WPP bruised: Shares of WPP PLC (WPP.LN)(WPP.LN) sank 11% after the advertising giant issued a disappointing growth outlook. The stock was on course for its largest percentage loss since October 1998, according to FactSet data.
In a trading update Wednesday, WPP cut its forecast for growth for 2017 (http://www.marketwatch.com/story/wpp-revenue-stutters-as-client-spending-drops-2017-08-23), citing major slowdowns in client spending in key industries such as consumer goods and retail.
"This is the second time the sale forecast has been trimmed this year, and that is a warning sign to traders, as it could be the start of a trend," said David Madden, market analyst at CMC Markets.
"In 2017, the share price has created a series of lower lows and lower highs, which is a worrying sign," he said in a note.
In the media group, also exposed to trends in advertising, shares of broadcaster ITV PLC (ITV.LN) fell 1.9% and publisher Pearson PLC (PSON.LN) lost 1.4%. Informa PLC (INF.LN) , an events and publishing company, gave up 1.3%.
Other movers: On Tuesday, advances in the mining sector helped the FTSE 100 rise 0.9% to break a three-session losing streak (http://www.marketwatch.com/story/ftse-100-led-higher-by-miners-as-provident-plunges-almost-60-2017-08-22) and log the biggest one-day percentage gain since July 12
Miners continued to move higher Wednesday, with BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) and Antofagasta PLC (ANTO.LN) up 1.2% and 2.3%, respectively.
Shares of Tesco PLC (TSCO.LN) (TSCO.LN) rose 1.6%. Shareholders and bond investors who were affected by the supermarket's accounting scandal in 2014 were able on Wednesday to start making claims through Tesco's multi-billion pound compensation scheme. Tesco said in 2014 it overstated its profit by GBP250 million. Investors who bought shares or bonds between Aug. 29 and through Sept. 19, 2014 are eligible.
"Compensating investors is the final chapter in the accounting saga and Tesco is keen to put this episode behind them," said Hargreaves Lansdown's head of financial planning Danny Cox, in a note. "Stronger trading, particularly in the U.K., means that after a 2-plus year absence, Tesco is planning to restore its dividend this year."
Brexit update: A slate of policy papers on Brexit was set to be published by the U.K. government on Wednesday. Reports suggested the government was backing away (http://news.sky.com/story/may-accused-of-brexit-climbdown-over-role-of-european-court-of-justice-11000974) from a harder stance on the European Court of Justice's say in U.K. law.
(END) Dow Jones Newswires
August 23, 2017 12:16 ET (16:16 GMT)