By Sara Sjolin, MarketWatch
U.K. stocks slipped and logged a second straight weekly loss on Friday, pushed lower by a stronger pound.
What are markets doing: The FTSE 100 index (FTSE:UK:UKX) dropped 0.1% to close at 7,380.68, falling for a sixth session out of the last seven. The benchmark managed to break a five-day losing run on Thursday to close 0.2% higher after a round of well-received corporate updates.
For the week, the FTSE 100 posted 0.7% loss, adding to a 1.7% decline from last week.
“The fact that yesterday’s bullish sentiment wasn’t replicated today could be a sign that markets may turn over next week,” said David Madden, market analyst at CMC Markets UK, in a note.
“Buying the dip has been a popular strategy in recent months, but on this occasion there isn’t the same optimism. Traders have been talking about a market top for a long time, and in light of the recent declines we may have seen the highs of the year,” he added.
What’s driving the markets : Analysts cited the stronger pound as the culprit behind Friday’s weakness for stocks. As 75% of FTSE 100 companies’ revenues are generated overseas, a strong pound hurts earnings when they are converted back into sterling.
The pound (XTUP:GBPUSD) bought $1.3220, up from $1.3196 late Thursday in New York.
“The [dollar] dropped overnight on news that Trump’s campaign was subpoenaed for documents regarding Russia,” said analysts at Accendo Markets in a note.
Special counsel Robert Mueller’s team in mid-October issued a subpoena to more than a dozen officials from Donald Trump’s campaign, asking them to hand over Russia-related documents, according to a report in The Wall Street Journal. Mueller is overseeing an investigation into whether Trump associates colluded with Russia to meddle in the 2016 presidential election. Both Moscow and Trump have denied any interference.
Meanwhile, investors continue to track the progress Republican tax-cut efforts in Washington. The focus is now on the Senate after the House of Representatives passed a sweeping bill to overhaul the tax code on Thursday.
Stock movers: Outside the FTSE 100, shares of Carillion PLC (LON:UK:CLLN) tanked 48% after the embattled construction company warned that full-year profits will be “materially lower than current market expectations.”
United Utilities Group PLC gave up 4.4% after HSBC cut the stock to hold from buy, according to Dow Jones Newswires.
Shares of Sky PLC rose 4.1% after reports Comcast Corp. (NAS:CMCSA) and Verizon Communications Inc. (NYS:VZ) are exploring bids to buy 21st Century Fox Inc.’s (NAS:FOXA) stake in Sky, among other assets.
Tax Overhaul Faces Tough Road Before Holiday Break
Sen. Ron Johnson (R., Wis.) said he opposes the current tax bill, marking a setback to GOP efforts to quickly pass a bill. WSJ's Gerald F. Seib explains where things now stand on the tax overhaul effort. Photo: Getty