London Markets: FTSE 100 lower as bank stocks come under pressure

December 01
16:04 2017

U.K. stocks fell Friday, with bank shares moving lower as trading for December got underway, pulling the blue-chips market potentially further into the red for the week.

What markets are doing: The FTSE 100 index UKX, -0.18% fell 0.2% to 7,315.04, as gains for oil and gas, health care and utility stocks were offset by losses for financial, industrial, consumer-related and other shares. On Friday, the gauge dropped 0.9% to a two-month low.

The pound GBPUSD, -0.2513% traded at $ 1.3513, compared with $ 1.3529 late Thursday in New York.

What’s moving markets: U.K. and European equities SXXP, -0.59%  fell alongside U.S. stock futures YMZ7, -0.10% ESZ7, -0.25%  , which were losing ground after the U.S. Senate late Thursday suspended a vote on a tax bill as lawmakers continued to debate a number issues related to cutting rates for individuals and corporations.

Read: Here’s what’s next for the Senate’s tax bill

Markets are looking more cautious in early moves today as the crucial vote on tax reform has been pushed back.

Passing tax reform was never going to be a walk in the park,” said Richard Perry, market analyst at Hantec Markets, in a note. “If the bill is delayed further there could be a bit of a wobble, whilst if it even gets voted down, there would likely to be a significant correction and reduction in risk sentiment.”

The prospect of lower U.S. corporate taxes under the Trump administration has aided bank stocks worldwide at times over the past year. But London-listed lenders were moving lower Friday. As well, shares of Royal Bank of Scotland Group PLC RBS, -1.27%  fell 1.2% after the company said it will close 259 branches and cut 680 jobs to reduce costs and spur more customers into using mobile and online services.

Investors were also keeping watch on the pound, which pushed above $ 1.3500 against the U.S. dollar on Thursday. Sterling strength can weigh on the FTSE 100, as around 75% of revenue for the index’s components is generated outside of the U.K.

The pound leapt Thursday after The Times newspaper said the U.K. was close to reaching an agreement over Northern Ireland with European Union officials aimed at avoiding a “hard border” between the U.K. province and the Republic of Ireland.

Stock movers: In the banking group, Barclays BCS, +0.00% BARC, -1.55%  fell 1.5%, HSBC HSBA, -0.04% HSBC, -0.28% 0005, -0.13%  lost 0.4%, Lloyds Banking Group LLOY, -1.03% LYG, -0.28%  was down 1.3% and Standard Chartered STAN, -0.49%  gave up 0.2%.

Among gainers, Shire PLC SHP, -0.34%  was up 0.6% after the drug maker named its new chief scientific and medical officers.

Economic data: A reading on U.K. manufacturing activity in November is due at 9:30 a.m. London time, or 4:30 a.m. Eastern Time, from IHS Markit/CIPS. Analysts polled by FactSet were looking for a reading of 56.5.

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