FTSE hit as UK political turmoil takes centre stage
Fiona Cincotta July 10, 2018 9:22 AM
The FTSE and major European markets started the day a touch higher but the upward trend did not last long as Britain’s domestic political turmoil started spilling over into the stock markets. The decline was less pronounced than it could have been because major oil stocks traded higher, benefiting from a rally in crude oil prices. Oil prices started rising earlier in the week and this morning Brent crude added another 0.77% and WTI traded 0.46% higher.
The FTSE and major European markets started the day a touch higher but the upward trend did not last long as Britain’s domestic political turmoil started spilling over into the stock markets. The decline was less pronounced than it could have been because major oil stocks traded higher, benefiting from a rally in crude oil prices.
Oil prices started rising earlier in the week and this morning Brent crude added another 0.77% and WTI traded 0.46% higher.
UK political situation worsens as Johnson resigns
Theresa May’s precarious political position became even more fragile after Boris Johnson, a vocal and strongly-pro-Brexit politician resigned late Monday, following on from the resignations the Brexit secretary and several other ministers on Sunday.
The next day or two will be crucial for domestic politics as May finds out whether she will end up facing a leadership challenge.
If her position is challenged, the Conservatives will have to choose the next leader, at which stage it will become clear whether the majority of the party is still in favour of Brexit, or a strong Brexit, or is opposed to Britain leaving the EU.
Currency traders are taking the view that this should still be positive for the UK and the pound is trading stronger against the dollar and the euro, up 0.24% and 0.18% respectively.
ICAP shares dive 31%
Shares in the FTSE 250-listed derivatives broker TP ICAP took a plunge this morning to trade 31% lower after the company said it would replace its current chief executive John Phizackerley with immediate effect.
The brokerage was sapped by £10 million of additional costs this year partially because of Brexit but also because of requirements linked to Mifid II regulatory changes including legal fees and IT changes, and added that this would spill into 2019 financial year with additional cost worth £25 million.
This will affect TP ICAP’s full year earnings this year and the company expects them to come in slightly below the bottom end of market expectations.
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