Tuesday 21 November 2017

Sterling recovers after London terror attack

Traders work on the floor of the New York Stock Exchange (NYSE)
Traders work on the floor of the New York Stock Exchange (NYSE)

Sterling recovered and government bond futures fell back on Wednesday, after an assailant was shot outside the UK parliament by police.

Sterling had hit the day's lows against the dollar and euro initially, while bond futures hit the day highs, but both had reversed those moves by mid-afternoon.

Having fallen to as low as $1.2424, sterling was trading at $1.2460, down just 0.1pc on the day, and up from the $1.2451 level at which it had been trading before news of the incident broke.

Having also hit the day's low of 87 pence per euro, sterling recovered to trade at 86.83 pence.

"It's all very unclear at the moment. Obviously there was a knee-jerk reaction, sterling sold 30 pips lower," said Chris Hawkes, an FX dealer at ETX Capital.

"It's now trading back up and I think that's basically on the news that it looks as though the initial threat has been nullified."

The Iseq overall index of Irish shares was down in late trading on Wednesday at 6660.32, a loss of 47.32 points, or 0.7pc.

Hospitality chain Hostelworld was down by 2.7pc, while Irish agri-food group Origin Enterprises fell by 2pc. Financial firm IFG also fell back by 2.6pc.

It was a strong day for Newry-based First Derivatives, whose share price was up by 10.7pc to €31.00. Mincon Group was up by 7pc as investors bought the stock following better-than-expected annual results. Ormonde Mining stocks gained 5.5pc during the day.

European shares fell to a two-week low extending losses from the previous session as they were weighed down by basic resources stocks and banks.

The pan-European STOXX 600 index was down 0.8pc as global markets were hit by worries that US President Donald Trump could struggle to deliver on his reflationary economic policies.

These doubts hit mining stocks, with a 1.7pc fall across the sector as the price of copper reached a two-week low. The banking sector dropped 1.8pc.

"Bank stocks were the biggest losers in US markets, just because they had been doing the best, and they were epitomising the reflation trade with higher interest rates and higher inflation with Trump-led spending," Jasper Lawler, senior market analyst at London Capital Group, said.

"As the market's been questioning itself, or at least unwinding ... that's been a sector that's been hit the most."

Dutch lender ING was among the biggest fallers, down 5.7pc after disclosing a criminal investigation that could result in significant fines.

"It is at this stage hard to assess ING's exact role in the alleged wrongdoing, let alone estimate the size of any penalties the group might face," analysts at KBC Securities said

The biggest individual faller was Gemalto, which plunged more than 20pc.

Indo Business

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business