Brexit pounds sterling, Europe stocks

Brexit pounds sterling, Europe stocks

European stocks dropped, with the pound falling sharply, on Thursday as a string of British government resignations appeared to put Prime Minister Theresa May and her draft Brexit deal in serious jeopardy, dealers said.

Main markets in the continent were all in the red, undercut by the uncertainty surrounding Brexit and Italy's fiscal troubles.
London's FTSE 100 was down 0.42 per cent to 7,003.92 points, Frankfurt's DAX 30 dropped 0.45 per cent to 11,360.84 points, Paris' CAC 40 slipped 0.93 per cent to 5,021.51 points and Milan's FTSE MIB dropped 1.36 per cent to 18,819.11 points. The Euro Stoxx 50 was down 0.71 per cent to 3,182.55 points.

In the US, New York was down 0.5 per cent in early trade, as was the S&P 500, while the Nasdaq was little-changed.

Asian equities, meanwhile, mostly rose, with Hong Kong and Shanghai rallying on hopes for an easing of the China-US trade war, while energy firms also enjoyed a much-needed bounce as oil prices stabilised.

Tokyo's Nikkei 225 was down 0.2 per cent to 21,803.62 points, while Hong Kong's Hang Seng was up 1.8 per cent at 26,103.34 points. The Shanghai Composite rose 1.4 per cent to 2,668.17 points, while Australian stocks inched up 0.05 per cent.
India's Sensex rose 0.6 per cent to 35,339.44. The rupee traded at Rs72.08 a US dollar from its previous close of Rs72.31.

Pounded hard
The UK currency was pummelled as four ministers, including Brexit secretary Dominic Raab, quit in protest against the EU exit deal which was mauled by all sides in parliament.

In volatile trading, the pound sank as low as 1.8 per cent to $1.2751, its second-biggest drop this year. It dropped 1.5 per cent to 88.57 pence versus the euro.

The euro, after earlier trading 0.3 per cent higher, fell 0.2 per cent to $1.1291.

The dollar jumped and traders bought into the safe-haven yen. The dollar index firmed half-a-per cent to 97.268. The yen gained 0.2 per cent to 113.42 against the dollar and was up 0.3 per cent versus the euro.

The Australian dollar, meanwhile, jumped more than 0.8 per cent to $0.7294 after upbeat jobs data. The New Zealand dollar also rose.

"The performance of the pound seems to perfectly reflect the mood in parliament and everywhere else right now. Even the weather is grey and gloomy," Oanda analyst Craig Erlam told AFP.

"The pound is under heavy pressure... as the UK-EU deal begins to look like a dead duck," noted IG analyst Chris Beauchamp. "As the steady drip of resignations hits the government, the UK's deal with the EU appears to be dead in the water already."

Gold held steady as the Brexit issue hit sterling and lifted the dollar, making bullion less attractive for holders of other currencies.
Spot gold, which rose 1 per cent in the previous session, was little-changed at $1,211.19 per ounce at 1350GMT, while US gold futures were up 0.1 per cent at $1,211.60 per ounce.

Oil rose, steadying after losing nearly 7 per cent over the previous three days, though concern about the prospect of an oversupplied market next year continued to weigh on prices despite Opec's message that it may cut crude output.

Brent crude oil futures were last up 63¢ on the day at $66.75 a barrel at 1454GMT, while US crude futures rose 38¢ to $56.63. - AFP, AP, Reuters

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