LONDON MARKETS: FTSE 100 Sags As North Korea-U.S. Tensions Flare Up
U.K. Prime Minister to speak about Brexit in Italy
Stocks in the U.K. fell Friday, dragged lower by a flareup in tensions between the U.S. and North Korea, but the benchmark FTSE 100 was on course to break a run of weekly losses.
The FTSE 100 index fell 0.3% to 7,245.01, led by losses in the basic materials and financial groups. But consumer-related shares were among advancing sectors. The index on Thursday ended 0.1% lower. A loss on Friday would be its third in a row.
The benchmark was still in line for a rise of 0.4% for the week, which would be its first weekly win in three.
But equities in London and across Europe sagged after North Korea's foreign minister warned that it may test a hydrogen bomb over the Pacific Ocean in response to U.S. President Donald Trump's threat to "totally destroy North Korea" if Pyongyang provoked the U.S. or its allies. Trump on Thursday ordered expanded sanctions North Korea, targeting individuals or companies trading with the country.
Read:Kim Jong Un calls Trump a 'mentally deranged U.S. dotard' (http://www.marketwatch.com/story/kim-jong-un-calls-trump-mentally-deranged-us-dotard-setting-off-scramble-for-dictionaries-2017-09-21)
"Needless to say, these comments have caused a degree of risk off in the markets with safe-havens benefiting," said analysts at FXPro in a note.
As gold prices caught haven bids, shares of gold producers Fresnillo PLC (FRES.LN) and Randgold Resources PLC (RRS.LN) (RRS.LN) rose 0.8% and 0.2%, respectively. Those stocks outperformed others in the mining group. Stock in Anglo American PLC (AAL.LN) fell 1.9% and Glencore PLC (GLEN.LN) lost 1.6%.
Iron ore heavyweight BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) fell 2.2% and rival Rio Tinto PLC (RIO) (RIO) (RIO) lost 0.8% even as the company said it's starting an additional $2.5 billion share buyback program (http://www.marketwatch.com/story/rio-tinto-to-start-25-bln-share-buyback-plan-2017-09-22). Rio is returning proceeds from the sale of Coal & Allied to shareholders.
May in Florence: U.K. Prime Minister Theresa May will be back in the spotlight Friday as she's scheduled to deliver a speech about Brexit in Florence, Italy. May was set to offer EUR20 billion to the European Union (http://www.bbc.co.uk/news/uk-politics-41342580) for access to the bloc's single market during a transition period after the U.K. leaves the EU, according to BBC News. May was also expected to outline a plan to offer certainty to citizens and businesses affected by Brexit.
May was slated to speak at 3:15 p.m. local time, or 2:15 p.m. London time. Ahead of her appearance, the pound was buying $1.3580, little changed from $1.3582 late Thursday in New York.
The pound rose above $1.35 on Thursday on reports that May will assert a 'soft Brexit' tone in Florence. "If the markets like what they hear and there isn't a negative response from [U.K.] counterparts then we could see further gains for the pound," said FairFX in a note.
Stock movers: Smiths Group PLC (SMIN.LN) dropped 4.7% as the technology company said its energy-engineering division, John Crane-- which accounts for about a quarter of group revenue -- continued to face challenges (http://www.marketwatch.com/story/smiths-group-pretax-profit-soars-on-wider-margins-2017-09-22) . Overall, Smiths logged a 74% rise in pretax profit for fiscal 2017.
(END) Dow Jones Newswires
September 22, 2017 04:36 ET (08:36 GMT)