LONDON MARKETS: U.K.'s FTSE 100 Gains, Boosted By Fresh Drop For Brexit-battered Pound

By Victor Reklaitis, MarketWatch

EU negotiator Michel Barnier blasts U.K. Prime Minister Theresa May's Brexit plan

The U.K.'s main stock index advanced Monday, getting a lift from the pound's slide, which came as a key European Union official criticized Britain's Brexit plan.

A softer pound can boost the FTSE 100, as the index's multinational companies generate most of their sales in other currencies.

How markets are performing

The FTSE 100 rose 0.8% to 7,488.44, after Friday's fall of 1.1% (http://www.marketwatch.com/story/uk-stocks-fall-on-brexit-and-trade-uncertainty-2018-08-31) that left it down 4.1% for August.

The British blue-chip gauge is showing a drop of nearly 3% for the year to date.

The pound was buying $1.2891, down from $1.2959 late Friday in New York.

Trading could be quiet in the U.K. on Monday, as U.S. investors have the day off for Labor Day (http://www.marketwatch.com/story/labor-day-which-markets-are-closed-2018-08-29).

What's moving markets

The political maneuvering around the U.K.'s plan for leaving the EU in March continued to grab the attention of traders.

Michel Barnier, the EU's top Brexit negotiator, blasted U.K. Prime Minister Theresa May's proposals in an interview with a German newspaper that was published over the weekend. Barnier reportedly said they could mean "the end of the single market and the European project (https://www.bbc.co.uk/news/uk-politics-45389610)," with his criticism coming after he appeared to offer an olive branch (http://www.marketwatch.com/story/british-pound-jumps-uk-stocks-fall-after-eus-barnier-offers-upbeat-brexit-comments-2018-08-29) last week.

Don't miss:How a 'no-deal Brexit' could play out for U.K. stocks (http://www.marketwatch.com/story/how-a-no-deal-brexit-could-play-out-for-uk-stocks-2018-08-31)

And see:A top London startup's CEO flags the biggest Brexit threat to his industry (http://www.marketwatch.com/story/a-top-london-startups-ceo-flags-the-biggest-brexit-threat-to-his-industry-2018-08-06)

What are strategists saying?

"Progress in the Brexit negotiations is not encouraging," said Konstantinos Anthis, head of research at ADS Securities, in a note.

"Theresa May ruled out a second referendum on Brexit, and the EU's chief negotiator Michel Barnier said he's opposed to a divorce blueprint that would keep economic ties with the union in place. The momentum for the pound is pointing lower, and even though we saw a relief rally over the past couple of weeks, these gains are now under threat."

Stocks in focus

WPP PLC's stock (WPP.LN)rose 0.6% after the advertising giant picked Mark Read as its new CEO (http://www.marketwatch.com/story/wpp-picks-company-veteran-mark-read-for-ceo-2018-09-03), placing a company veteran at the helm following the departure of founder Martin Sorrell.

Off the FTSE 100, shares in Dechra Pharmaceuticals PLC (DPH.LN)dived 15% after the company said its pretax profit rose modestly (http://www.marketwatch.com/story/dechra-pharma-shares-fall-19-after-results-2018-09-03) as increased costs largely balanced out revenue growth. Dechra produces pharmaceutical products for animals.

(END) Dow Jones Newswires

September 03, 2018 04:52 ET (08:52 GMT)

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