London stocks under pressure as oil prices fall; U.S. markets closed

The U.K.’s main stock index was under pressure Thursday, weighed by weakness for resource stocks and banks and a strong pound.

Investors were jittery after losses late in Wednesday’s session for U.S. equities. Those markets will be closed Thursday for Thanksgiving, and will also close early on Friday, which could mean thin trading to finish the week for London.

How are the markets performing?

The FTSE 100 UKX, -0.90% dropped 1% to 6,978.51, after closing up 1.19% on Wednesday — the best one-day percentage gain close for the FTSE 100 since Sept. 21, according to Dow Jones Market Data.

The British pound GBPUSD, +0.7279% rose to $1.2840, after closing at $1.2776 late Wednesday in New York.

What drove stocks?

Wall Street trading on Wednesday saw energy and tech stocks rebound, but equities shed some gains just before the close. The three-day runup to Thanksgiving marked the worst pre-Thanksgiving performance in 7 years for all three big U.S. indexes.

Stock futures indicated a jittery start when traders finally return on Friday, with oil prices also under pressure, after rising on Wednesday.

Investors were also grappling with a stronger pound, which can weigh on the FTSE 100, as the index’s multinational companies generate most of their sales in other currencies. Those gains came after U.K. Prime Minister Theresa May reported “good progress” on Brexit negotiations with European Union chief Jean-Claude Juncker.

But a conclusive deal is still seen as elusive ahead of the planned EU Summit on Nov. 25, with May headed to Brussels on Saturday for extra talks to try and shore up an agreement.

What stocks are active?

Poorly received results drove down the stocks of energy company Centrica PLC CNA, -6.66% which fell nearly 8% and water company Severn Trent PLC SVTRF, -6.55% which dropped 2.7%.

Heavily-weighted resource stocks slipped as oil and some metals prices came under pressure. BP PLC BP, +2.92% BP., -0.90% fell 1%, Royal Dutch Shell Group PLC RDS.A, +2.80% RDSA, -0.85% and Rio Tinto PLC RIO, -1.82% RIO, +1.32% dropped 2%.

Among other heavyweights, AstraZeneca PLC AZN, -0.27% AZN, -0.91% dropped 1.8% and British American Tobacco PLC BATS, -0.83% lost 2%. HSBC Holdings PLC HSBC, +2.00% HSBA, -1.21% fell 1.4%.

 

/marketwatch.com

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