LONDON MARKETS: London Markets Edge Higher As Pound Hits Four-month Low

By Dave Morris

London markets shook off a weakening pound and a disappointing industrial orders figure to erase Monday's decline.

How did markets perform?

The U.K.'s FTSE 100 is essentially flat on the week at 7,351.2, rising 0.5% to wipe out Monday's 0.5% decline.

The pound was hit harder, shrinking 0.3% to $1.2685, a four-month low.

What's moving the markets?

U.S. officials granted Huawei a temporary reprieve (http://www.marketwatch.com/story/us-to-offer-temporary-exemptions-to-huawei-export-ban-2019-05-20) from some of the restrictions imposed on Friday. The Chinese telecommunications company caught in the U.S.-China trade dispute was granted a 90-day window to purchase equipment and parts needed to maintain existing activities, which may be renewed.

The "new and improved" Brexit deal promised by U.K. Prime Minister Theresa May is expected to contain promises on workers' rights and environmental protections, and will seek cabinet approval on the concessions, according to the latest report in The Times (https://www.thetimes.co.uk/article/may-will-ask-cabinet-to-agree-on-concessions-cnswxbqkw). The move will put pressure on opposition Labour Party leader Jeremy Corbyn as some M. P.s may now support the bill, but many in the rank-and-file will staunchly oppose it.

The U.K. pound took a drubbing Tuesday, falling to a four-month low. Brexit uncertainty and U.S. dollar strength were the two key drivers.

In economic data, the CBI industrial trends total orders survey showed that in May, orders fell to -10, a sharp decline after a run-up in manufacturing driven by stockpiling for the now-aborted March 29 Brexit date. The figure was the lowest since October 2016.

Which stocks are active?

Entertainment One Ltd. (ETO.LN) fell 2% after reporting fiscal 2019 earnings, as pretax profit fell 43% year over year. The Peppa Pig franchise owner blamed the dip on one-off charges.

Tesco Bank, the lending arm of supermarket chain Tesco PLC (TSCO.LN), said Tuesday that it was exiting the mortgage market (http://www.marketwatch.com/story/tesco-to-explore-sale-of-mortgage-portfolio-2019-05-21-348518) and looking for a buyer of its existing mortgage assets, citing "challenging market opportunities". Shares in the unit's parent traded 0.6% higher.

(END) Dow Jones Newswires

May 21, 2019 06:34 ET (10:34 GMT)

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