LONDON MARKETS: Ryanair, Trade Worries Sink London Markets

By Dave Morris

Ryanair's gloomy outlook for the coming year dragged on London markets Monday and fellow airlines, while banks were also weaker.

A fresh bout of trade tensions also weighed on London and European equities.

How did markets perform?

The U.K.'s FTSE 100 dropped 0.9% to 7,285.65. On Friday it had edged down 0.1%.

The pound reversed course and gained 0.1% to $1.2736 after falling 0.4% Friday.

What's moving the markets?

Sunday's meeting of the Organization of the Petroleum Exporting Countries (OPEC) sent oil prices higher (http://www.marketwatch.com/story/oil-prices-rise-on-signs-opec-may-extend-output-cuts-2019-05-20) after Saudi Energy Minister Khalid al-Falih said efforts to shrink crude inventories could continue into the second half of 2019. al-Falih said further inventory management would be "gentle" and remain responsive to the needs of the market.

Trade tensions rebooted Monday after news that some tech companies in the U.S. and elsewhere have begun to comply with the White House's ban (http://www.marketwatch.com/story/google-xilinx-begin-to-comply-with-trump-ban-on-huawei-2019-05-20) on China's Huawei Technologies Inc. Shares of Infineon Technologies Inc. (IFX.XE) slid nearly 5% after the German chip group said it was also cooperating.

The war of words between the U.S. and China continued as President Donald Trump said concessions in negotiations could not be "50-50" because trade practices by China had historically damaged the U.S. There is currently no timeline for the two sides to resume talks.

Writing in the Sunday Times (https://www.thetimes.co.uk/past-six-days/2019-05-19/comment/my-withdrawal-agreement-bill-will-be-a-bold-new-offer-to-mps-7dxkkqs27), U.K. Prime Minister Theresa May said she hoped to get a Brexit deal through Parliament on her fourth attempt by making what she called a "new and improved" offer. The move eliminates the prospect of indicative votes, but critics warned that the gambit would fail unless there were significant changes.

Which stocks are active?

Ryanair Group Holdings PLC (RYAAY) plummeted 4.1% after warning that the grounding (http://www.marketwatch.com/story/ryanair-warns-of-profit-hit-over-737-max-grounding-2019-05-20) of Boeing's 737 MAX jets would have a negative impact on the coming year's results. The company reported full year earnings to March 31 showing pretax profits fell 30% year over year. It cited fuel and staff costs as factors in the decline.

Among banks, heavily weighted HSBC Holdings PLC (HSBA.LN) (HSBA.LN) fell 1%, while Lloyds Banking Group PLC (LLOY.LN) (LLOY.LN) fell 1.5%.

(END) Dow Jones Newswires

May 20, 2019 09:43 ET (13:43 GMT)

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