April 3, 2018 / 9:22 AM / 9 months ago

No Sky fall as FTSE falters

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* FTSE 100 down 0.8 pct

* Sterling strength weighs on dollar-earners

* Miners rise on China data

* Sky gains after Fox says could separate Sky News

By Kit Rees

LONDON, April 3 (Reuters) - Britain’s top share index declined with other European bourses at the start of the second quarter as a stronger pound weighed on its dollar-earning constituents, with Sky TV among just 10 or so stocks in positive territory.

Shares in Sky rose around 1 percent after Twenty-First Century Fox said it could legally separate Sky News within the group to allay a British regulator’s concerns about the channel’s independence under Rupert Murdoch’s ownership.

Fox agreed to buy the 61 percent of Sky it did not already own in December 2016, but the deal has been repeatedly delayed by the British government and regulators.

The blue chip FTSE 100 index was down 0.8 percent at 7,003.69 points by 0852 GMT, while mid caps fell 1.1 percent following a market holiday.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said that though the UK market was “unloved”, a number of factors such as the imminent end of the era of cheap money were supportive of M&A activity.

“In the background there is what is happening in terms of the global economy. This year looks to be OK, but if this kind of trade war stuff does escalate, that could put a dampener on things,” Khalaf added.

Worries over global trade and a tumble in U.S. heavyweight tech stocks has hit risk assets so far this year, while a spate of profit warnings and ongoing Brexit-related uncertainty has dented appetite for British stocks.

The FTSE 100 slid in line with the broader European market, with financials, industrials and health stocks shaving the most points off the index.

A rise in the pound also put pressure on large, overseas-earning stocks such as Reckitt Benckiser and Diageo which declined 1.7 percent and 0.8 percent respectively.

Mining stocks were a bright spot as solid manufacturing data from China, the world’s biggest consumer of metals, boosted the price of copper to a one-week high.

Shares in Glencore, BHP Billiton and Rio Tinto all rose 0.1 to 0.3 percent, while precious metals miner Randgold Resources gained 0.9 percent.

The FTSE’s muted start to the second quarter follows its worst first quarter since 2011, while March saw its third month of declines in a row. (Reporting by Kit Rees Editing by Catherine Evans)

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