The U.K.’s main stock benchmark finished the session lower on Thursday, ending a four-day winning streak for the FTSE 100, as gains in health-related AstraZeneca PLC and metals producer Fresnillo PLC were more than offset by a plunge in shares of travel stock TUI AG.
How markets are performing
The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -3.49% fell 0.5%, or 34.88 points, to 7,741.77 on Thursday, retracing Wednesday’s higher finish that left the index at its highest level since May 24.
What’s moving markets
Thursday’s downdraft for the FTSE appeared to be at least partly underpinned by TUI AG’s /zigman2/quotes/207049334/delayed UK:TUI -8.15% , which despite reducing its earlier tumble closed down 2.5%. Shares of the travel company were slammed as it explained that a bout of blistering hot weather throughout Europe hurt its bookings business. “Hot weather isn’t usually the right environment for last-minute bookings,” TUI’s CEO Fritz Joussen said on a call to discuss the firm’s quarterly results.
Meanwhile, the British pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.0620% continued its slide as the U.S. dollar gained strength and last bought $1.2846 compared with $1.2882 late Wednesday. The threat of a no-deal Brexit has loomed over the British currency, pushing sterling to a 12-month low a day ago and helping support a punch higher for the FTSE. For the FTSE 100’s multinational companies, a softer pound can be a boost as most of their sales are generated in other currencies.
Global trade tensions hovered in the backdrop as China’s Ministry of Commerce released an updated list of items it would target with tariffs if the U.S. were to impose its planned 25% tariffs on an additional $16 billion of Chinese goods in retaliation to the U.S.’s duties on now some $50 billion in Chinese imports. Both tariff packages are set to be enacted near the end of the month, which could ratchet up tariff tensions and fears about a spillover into the broader economy.
Separately, the U.S. is also getting ready for a new series of sanctions against Moscow over a nerve-agent attack on a former Russian spy and his daughter in the U.K., which could elevate global anxieties.
What are strategists saying?
Michael Hewson, chief market analyst at CMC Markets, said that “if the Trump administration follows through on its threat to extend tariffs on to another $200bn worth of Chinese goods, while concerns about new US sanctions on Russia may well also limit the upside for European markets today,”
“For the time being markets appear to be putting to one side the prospect of this happening in the near future which suggests that for now we are probably in the foothills of a full blown trade war,” he said.
“That doesn’t change the fact that European markets have underperformed their peers in the last few weeks and today’s open doesn’t look like it will be any different, as we get another lower open,” Hewson said.
Stocks in focus
Fresnillo PLC shares /zigman2/quotes/201300065/delayed UK:FRES -3.27% powered advancers on the U.K. benchmark, and ended the day 3.3% higher, as gold prices got a slight lift higher on Thursday.
Cineworld Group PLC /zigman2/quotes/206525056/delayed UK:CINE -8.33% shares were among the top gainers in London, climbing over 10% after posting upbeat profit and revenue, with those results lifted by its acquisition of U.S.-based Regal Entertainment Group.
Shares of AstraZeneca PLC /zigman2/quotes/203048482/delayed UK:AZN -1.67% ended up 2.6%. Along with Fresnillo, AstraZeneca led the FTSE 100 gainers of the session.
InterContinental Hotels Group PLC shares /zigman2/quotes/202865596/delayed UK:IHG -2.55% rose by 1.9%.
TUI AG led early losers on the FTSE 100, down nearly 8%, representing the worst one-day fall for the company since 2016. However, shares were most recently down 2.5%.
CRH PLC ’s stock /zigman2/quotes/201759252/delayed UK:CRH -3.34% also dropped 2.5%, the second-worst performer on the FTSE after TUI.