FTSE perks up after initial dip

The FTSE proved surprisingly resilient this morning, first plunging on opening but then moving higher despite a slew of negative news from the UK’s blue chip.

The FTSE proved surprisingly resilient this morning, first plunging on opening but then moving higher despite a slew of negative news from the UK’s blue chips and the launch of a money laundering investigation into Dutch bank ABN AMRO. 

Shares in publishing house Pearson sank over 16% after the company warned it expects lower profits from US education literature. British Airways parent International Consolidated Airlines and tobacco firm Imperial Brands also dropped in early trade, 3% and 9% respectively, following profit warnings from both companies. 

IAG echoed some of the issues that led to the demise of the Thomas Cook travel company earlier this week but pointed the main finger of blame at pilot strikes which cost the company EUR137 million. 

But this is relatively mild compared to the troubles of ABN AMRO which is now being investigated for financing of terrorism and money laundering. In a similar case last year Dutch peer ING was found guilty and fined EUR775 million. 

On the FTSE, banks, telecoms, retailers and resources companies are providing some counterbalance to the beleaguered Pearson and IAG while some support is coming from positive noises from China about the Sino-US trade relations. 

Pound lower with clock ticking on Brexit

The pound is a touch weaker a day after Parliament has gone back into session following the Supreme Court’s ruling that the prorogation was illegal. Apart from the bile exchanged among the MPs it is not clear how things will move forward on the Brexit front. The ball it seems is in the Prime Minister’s court and speculation about what Mr Johnson will do next ranges from resigning to shutting down Parliament one more time. 

The euro is holding against the dollar but is beginning to slightly weaken after the unexpected resignation of a senior member of the European Central Bank. The decision could spell trouble ahead as Sabine Lautenschläger, one of the bank’s six-member executive board, decided to leave in a policy dispute over the ECB’s September decision to restart a massive bond-buying programme. 

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.