U.K.’s FTSE 100 Drops With Exporters After Brexit Court Ruling
(Bloomberg) -- Exporters dragged the FTSE 100 Index to a seven-week low, while banks and property stocks rallied as the pound strengthened after a court ruled the government must hold a vote in Parliament before starting a two-year countdown to Brexit.
HSBC Holdings Plc, Diageo Plc and AstraZeneca Plc, which get most of their revenue outside Britain, fell at least 1.1 percent. Royal Bank of Scotland Group Plc led gains among lenders, up 6.1 percent, while real estate firms British Land Co. and Land Securities Group Plc advanced 2.4 percent or more. EasyJet Plc, whose shares have tumbled amid sterling weakness, climbed 3.1 percent as the currency rose to a four-week high against the dollar.
The FTSE 100 lost 0.8 percent at the close, reversing an advance of as much as 0.4 percent after the ruling by the panel of London judges. With the government saying it will appeal the decision, it will likely set up a constitutional confrontation at the country's Supreme Court next month. The FTSE 250 Index of mid-cap shares more linked to the domestic economy gained 0.7 percent.
The FTSE 100 capped a fourth daily loss. It has lost momentum after a pound-fueled rally in exporters took it to an intraday record in October.
In the wake of the U.K.'s secession vote, Bank of England officials will tighten or ease policy as needed, Governor Mark Carney said Thursday. While the central bank kept rates unchanged as forecast, he said the path of inflation needs to be watched closely.
Among other shares active, Randgold Resources Ltd. tumbled 6.3 percent after reporting a decline in gold output. Fresnillo Plc fell 4.3 percent as silver slumped. Shire Plc rose 2.4 percent after rival Roche Holding AG confirmed a report it saw four serious adverse events with its hemophilia drug.
To contact the reporter on this story: Namitha Jagadeesh in London at njagadeesh@bloomberg.net. To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net, Namitha Jagadeesh
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