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European Stocks in the Doldrums After Positive Open, Strong Pound Weighs on FTSE 100 Index


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European equity benchmarks opened mainly higher on Friday only to quickly fall into negative territory as a weaker greenback pushed the euro and pound sterling higher, the latter weighing heavily on London's benchmark index.

Around three quarters of the stocks listed on London's key equity gauge, the FTSE 100, generate the majority of their revenue in foreign currencies. When the British currency rises, the value of sales made overseas in foreign currencies is weakened when they are converted back into pounds sterling. The rise in the pound coincided with positive UK retail sales figures on Thursday and, later, reports that US President Donald Trumps campaign had been asked to hand over documents in a Russia-related investigation.

Oil prices meanwhile were edging higher after the Federal Reserve Bank of Dallas said on Thursday that production growth in the Permian Basin, which straddles part of the states of Texas and New Mexico, remained strong with production rising there for a 13th consecutive month in October. West Texas Intermediate crude oil, the main US oil benchmark, was 0.8% higher at $55.57 per barrel while Brent crude, the international gauge, was up by 0.3% at $61.54 per barrel recently.

In equities, United Utilities, a water services company, was leading the decliners on London's FTSE 100 Index, 3.3% lower, followed by Mediclinic International, a private hospital group, down by 2.3% and Severn Trent, a water services company, down by 1.9%. Mondi, a packaging and paper company, was 1.3% lower.

On Frankfurt's DAX, Fresenius, a kidney dialysis company, was 4.7% lower, RWE, a supplier of electricity and natural gas, was down by 2.3% and energy company E.ON was 1.1% lower. Daimler, an automobile manufacturer, was down by 0.9%. And, on Paris' CAC-40, car-maker Peugeot was 1.2% lower, Bouygues, a telecommunications, media and construction company, and Engie, a natural gas and electricity supplier, were both down by 1.1% and hypermarket operator Carrefour was down by 1.0%.

The pan-European Stoxx 600 Index was 0.21% lower, London's FTSE 100 Index was down by 0.36%, Frankfurt's DAX was 0.14% lower and Paris' CAC-40 was down by 0.32% at the time of writing.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing , Stocks
Referenced Symbols: DAX



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