European stocks drop while sterling tumbled
On Thursday the pound slumped, European stocks dropped and U.S. equity futures pared a gain as a series of British ministers quit in protest at Theresa May’s Brexit deal, plunging the U.K. government into crisis. Investors turned to havens including Treasuries, bunds and gilts.
Sterling tumbled after Brexit Secretary Dominic Raab announced his resignation on Twitter, the highest profile of several departures on Thursday morning. The events throw into doubt May’s ability to secure Parliament’s support for her plan — and even to survive as leader.
As the resignations rolled in, the FTSE 100 Index trimmed its gains in trading volumes double the 30-day average and gilts surged. Futures for the S&P 500 had been solidly up before they pared their advance. The yen rose, and gold and the Swiss franc were steady.
For all the worries assailing investors — on top of Brexit is the ongoing trade dispute and Italian budget stress — they are at least receiving a steady message from the U.S. central bank. In a question-andanswer session late on Wednesday Federal Reserve Chairman Jerome Powell played down recent turbulence in equities, saying volatility was only one of many factors that the Fed takes into account.
Futures on the S&P 500 Index increased 0.2 percent as of 10:45 a.m. London time, the first advance in more than a week. The Stoxx Europe 600 Index declined 0.5 percent to the lowest in more than two weeks. The U.K.’s FTSE 100 Index rose 0.1 percent, the largest advance in a week. Germany’s DAX Index rose less than 0.05 percent. The MSCI Asia Pacific Index increased 0.7 percent, the first advance in a week and the largest climb in more than a week. The MSCI Emerging Market Index climbed 0.9 percent to the highest in a week on the biggest increase in almost two weeks.
This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.