LONDON MARKETS: FTSE 100 Slips As Wait-and-see Mode Sets In Before Trump Takes Office

By Carla Mozee, MarketWatch

Blue chips on track to break string of weekly gains

U.K. stocks edged lower Friday, on course to break a string of weekly wins, with investors waiting to hear what Donald Trump may say about his economic plans as he's sworn in as the U.S.'s 45th president.

The FTSE 100 was off 0.1% at 7,204.91, with only the telecom, utility and oil and gas sectors advancing. On Thursday, the benchmark lost 0.5%. (http://www.marketwatch.com/story/ftse-100-loses-ground-weighed-by-housing-shares-royal-mail-2017-01-19)

Caution appeared to be setting in ahead of Trump's inauguration in Washington, D.C. The swearing-in ceremony will begin as London trade closes, at 4:30 p.m. London time, or 11:30 a.m. Eastern Time. Read:What time is the inauguration? (http://www.marketwatch.com/story/when-is-the-inauguration-2017-01-17)

Investors worldwide will look for "confirmation that he plans to follow through with his preelection rhetoric and push massive fiscal stimulus through Congress, as well as easing regulatory burdens," which could reignite the dollar's postelection rally, Charalambos Pissouros, senior analyst at IronFX Global Ltd., said in a note.

Banking shares globally have been among the beneficiaries of a postelection rally, on expectations the industry may enjoy a more relaxed regulatory environment during a Trump administration.

In London trade Friday, Lloyds Banking Group (LLOY.LN) (LLOY.LN) shares were up 1.1%, and Royal Bank of Scotland PLC (RBS.LN) (RBS.LN) was higher by 1%. RBS owns U.S.-based lender NatWest. But shares of Barclays PLC (BCS) (BCS) were off 0.1%.

For the week, the FTSE 100 is on track for fall of 1.9%. That would mark the index's first decline in six weeks. On Monday, the benchmark broke a 14-day winning streak (http://www.marketwatch.com/story/ftse-100-notches-small-gain-as-pound-slides-on-hard-brexit-fears-2017-01-16), the longest on record for British blue chips. That string of gains also contained 12 consecutive all-time closing highs.

Part of the FTSE's 100 loss this week stemmed from Tuesday's rally in the pound. During trading that day, sterling surged nearly 3% against the dollar after U.K. Prime Minister Theresa May said terms of the final Brexit deal negotiated between U.K. and EU officials would be put to a vote in the British parliament.

On Friday, the pound was buying $1.2338, up from $1.2299 late Thursday. It was on track for a weekly gain of more than 1% against the dollar.

If Trump during his inauguration speech "avoids the crucial topics of fiscal and regulatory reforms once again, or if his stance towards them seems less confident than preelection, the dollar could resume its downward correction, as investors become increasingly impatient regarding the absence of details on the nation's fiscal direction," Pissouros said.

Data: A reading on U.K. retail sales will be released at 9:30 a.m. London time by the Office for National Statistics. Sales are expected to have jumped 7.3% in December on a year-over-year basis. In November, sales climbed 5.9%.

(END) Dow Jones Newswires

January 20, 2017 04:11 ET (09:11 GMT)

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