FTSE down as Rolls Royce takes a battering
Fiona Cincotta September 20, 2019 10:17 AM
FTSE struggles for direction
The FTSE is trying to decide which way to go this morning as Rolls Royce and BAE Systems weigh on the index but a pound-induced bounce in property firms and grocery chains provides some counterbalance.
Rolls Royce took the biggest hit this morning after it indicated that the problems with its Trent 1000 engines would take longer to resolve than initially expected. BAE Systems also followed suit, plunging 3% as the threat of an Iran conflict seems to have gone on the back burner for the moment but the move was possibly an overreaction given the recent flow of company news which was very positive and included signing a new half a billion technology contract with the Pentagon only yesterday.
On the other hand housebuilders, DIY specialists and supermarket chains saw a healthy bounce after the pound hit the highest level in over two months.
The boost for sterling came courtesy of European Commission President Jean-Claude Juncker who said that a deal with the EU is achievable and that a new Brexit deal could be reached before the October deadline. The pound is trading above $1.253, a level not seen since mid-July and at EUR1.134, last seen at the start of August.
Sino-US talks restart
For the first time in almost two months the US and China are back at the negotiating table, a step paving the way towards real decision-makers’ discussions scheduled for October. The sensitive subjects of intellectual property and forced transfer of technology are back on the agenda and may again prove stumbling blocks for a deal.
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