By Victor Reklaitis, MarketWatch
The U.K.’s main stock index closed modestly lower Thursday, while the pound also dropped, as traders assessed fresh details covering the country’s contingency plans for a “no-deal” Brexit.
How markets are performing
The British blue-chip gauge is showing a drop of 1.6% for the year to date.
The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.0077% was buying $1.2831, down from $1.2914 late Wednesday in New York, but holding above last week’s more-than-one-year low around $1.27.
What’s moving markets
The U.K. government on Thursday released the first round of documents detailing the expected impact of a “no-deal” Brexit, though parts of the big reveal already had been featured in news reports. The move signaled that London is serious about walking away from talks if it doesn’t get a satisfactory agreement with the European Union.
Analysts have warned that a disorderly exit from the EU — without a deal covering future relations with the trade bloc — likely would cause severe economic disruption. The U.K. is slated to leave the EU in March.
Brexit Secretary Dominic Raab said the technical notices drawn up by various government departments are a “sensible, measured and proportionate approach to minimizing the impact of no deal on British firms, citizens, charities and public bodies.” He also said U.K. officials are confident that a deal with Brussels is still the most likely outcome, even as a new survey suggested most Brits don’t share that view.
What are strategists saying?
Raab’s “‘practical and proportionate’ advice in case — as is looking increasingly likely — the U.K. spirals out of the EU sans deal appears to have spooked sterling,” said Conor Campbell, a Spreadex analyst, in a note.
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Stocks in focus
Mining stocks Anglo American PLC /zigman2/quotes/201381512/delayed UK:AAL -2.17% and Fresnillo PLC /zigman2/quotes/201300065/delayed UK:FRES -2.74% were among the FTSE 100’s biggest losers, falling by 2.6% and 2.4%, respectively, as prices for gold and other metals dropped.
Shares in CRH PLC /zigman2/quotes/201759252/delayed UK:CRH +1.30% /zigman2/quotes/202550827/composite CRH +0.88% declined by 0.7%, as morning gains failed to stick. The provider of construction materials said first-half pretax profit increased 5% as its markets continued to recover.
AstraZeneca PLC’s stock /zigman2/quotes/203048482/delayed UK:AZN +0.61% /zigman2/quotes/200304487/composite AZN -1.42% shed 0.9% after the drug giant said a clinical trial for a treatment for lung disease didn’t show it to be superior to an existing treatment.