A slowdown in the outlook for British growth due to Brexit hit London stocks Wednesday, while the Dow set another record and the dollar rose to around 14-year peaks.
British stocks opened higher, but retreated after finance minister Philip Hammond offered a gloomy forecast in the aftermath of Britain’s decision to exit the European Union. Hammond projected 2017 growth of only 1.4 percent, down from the prior estimate of 2.2 percent. A late rally helped the FTSE 100 close practically flat, reports BSS.
Equities in Paris and Frankfurt retreated as investors mulled the prospects for a global wave of populism to claim new scalps in France, the Netherlands and elsewhere in 2017.
British stocks opened higher but retreated after finance minister Philip Hammond offered a gloomy forecast in the aftermath of Britain’s decision to exit the European Union
Eurozone business activity picked up strongly in November, data showed, but “political uncertainty in the region continued to ramp up ahead of some looming eurozone elections,” according to a research note from Charles Schwab.
The blue-chip Dow Jones Industrial Average and broad-based S&P 500 both edged to fresh records for the third straight day. But the tech-rich Nasdaq slipped,suggesting the post-election stock-buying rally was beginning to flag.
The dollar gained against the euro and the yen after minutes from a Federal Reserve meeting this month showed most policymakers thought a rate hike would be appropriate “relatively soon.”
The minutes “confirmed that the Committee is ready for a December rate hike,as members are less concerned about low inflation than before, and more concerned about waiting too long and causing the economy to overheat,” IHS said in a research note. The dollar has been trading around 14-year heights as markets expect the Fed to hike interest rates next month.
FXTM Research Analyst Lukman Otunuga said “speculation of a December rate hike reached mind boggling levels” with markets having “priced in a surreal 100 percent probability of the Federal Reserve taking action before year end”.
Oil prices dipped as traders weighed contradictory signals from key oil producers ahead of next week’s meeting of the Organization of Petroleum Exporting Countries.
