EasyJet upgraded; pound falls below $1.34
U.K. stocks erased an earlier loss and closed in positive territory on Wednesday, helped higher by a weaker pound amid no signs of a breakthrough in the Brexit deadlock.
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What markets are doing: The FTSE 100 index rose 0.3% to close at 7,348.03, after trading as low as 7,289.36 earlier in the day.
The pound fell to $1.3383 from $1.3442 late Tuesday in New York. Against the euro, sterling bought EUR1.1368, down from Tuesday when the pound bought EUR1.1367.
What's moving markets: The pound moved to intraday lows after U.K. Brexit Secretary David Davis reportedly said the government hasn't carried out any economic assessment (http://www.marketwatch.com/story/uk-hasnt-carried-out-assessment-of-brexits-economic-impact-davis-2017-12-06) on how Britain's exit from the European Union will impact different parts of the British economy. Davis said the government will quantify the Brexit impact later in the process of Brexit negotiations, as there would be no point in drawing up impact assessments too early.
Davis's comments come as London is rushing to hammer out a deal on three key issues--the divorce bill, EU citizens' rights and the Irish border--ahead of an EU summit next week. EU leaders need to agree that the U.K. has made "sufficient progress" on those issues before exit talks can move on to the second phase that includes trade and a potential transition period. A deal was reportedly very close on Monday, but a last-minute upset over the Irish border scuttled the agreement in the 11th hour.
A weaker pound tends to prop up the FTSE 100 as around 75% of revenue for the index's components are generated overseas.
Also read:Terrorist plot to kill Theresa May thwarted by British agents (http://www.marketwatch.com/story/terrorist-plot-to-kill-theresa-may-thwarted-by-british-agents-2017-12-06)
Stocks trading in London had opened lower, following in the footsteps of losses Tuesday on Wall Street (http://www.marketwatch.com/story/dow-looks-on-track-for-another-record-while-nasdaq-appears-set-to-fall-again-2017-12-05) and in Asian markets, where tech shares contributed to a 2% slide in Japan's Nikkei Average .
Read:European 'FANG' stocks? They exist, but here's why you shouldn't buy them (http://www.marketwatch.com/story/european-fang-stocks-they-exist-but-heres-why-you-shouldnt-buy-them-2017-11-27)
In London, shares of enterprise software company Micro Focus International PLC (MCRO.LN) fell 1.9% and business software maker Sage Group PLC (SGE.LN) lost 0.7%.
Read:Here's how violent the stock-market rotation out of tech has been (http://www.marketwatch.com/story/heres-how-violent-the-stock-market-rotation-out-of-tech-has-been-2017-12-05)
Stock movers: EasyJet PLC (EZJ.LN) shot up 1.3% after a ratings upgrade to overweight from underweight at J.P. Morgan Cazenove. The discount airline said it'll roll out German domestic routes from Berlin next month, according to media reports.
Hammerson PLC (HMSO.LN) fell 6.2% after the retail property developer said Wednesday it's buying shopping center owner Intu Properties (INTU.LN) for GBP3.4 billion ($4.6 billion). Intu shares rallied 14%.
Shares of Saga PLC (SAGA.LN) on the midcap FTSE 250 dropped 21% after the travel and insurance company warned that it expects its underlying profit growth (http://www.marketwatch.com/story/saga-profit-lagging-on-monarch-collapse-headwinds-2017-12-06) for its current financial year to be behind the previous year. It cited more challenging insurance brokering conditions and disruption to its tour operations as reasons for the outlook.
The FTSE 250 fell 0.2% to close at 19,828.94.
(END) Dow Jones Newswires
December 06, 2017 12:36 ET (17:36 GMT)