UK shares dip as Boeing 737 output cut bruises industrials
By Muvija M
April 8 () - Britain's main stock index bounced back on Monday, rescued from the red by a turnaround in oil majors, although financials fell and industrials were bruised after Boeing said last week it was slashing its 737 aircraft output.
The exporter-heavy FTSE 100 was up 0.1 percent at its highest closing level since early October, outshining its European and U.S. counterparts, while the midcaps dipped 0.1 percent.
The gains helped cushion steep falls in blue-chip financial stocks, which were the biggest drags on the FTSE 100. David Madden, an analyst at CMC Markets, said the losses were triggered due to profit taking.
With the recent economic indicators out of China slightly more stable and continued positive trade talks between Beijing and Washington, Madden said, "it's almost like that's your cue to take your money out of the table".
Also notably falling was an index of aerospace and defence stocks, which lost 0.6 percent after Boeing, the world's largest planemaker, announced plans on Friday to slash its monthly production of 737 aircraft by nearly 20 percent.
The output cut, following two deadly crashes, signalled that Boeing does not expect aviation authorities to allow the plane back in the air any time soon.
"With Boeing trimming manufacturing and production, there's going to be lesser demand for products manufactured by Meggitt and Melrose... Fewer planes by Boeing is going to lead to fewer contracts that Meggitt and Melrose have," Madden said.
Blue-chip industrials Melrose and Ashtead slipped 2 percent and 1 percent, respectively.
BOOKMAKERS RUN OUT OF LUCK
London-listed shares in bookrunner Paddy Power lost 2.2 percent after hot-favourite Tiger Roll secured a second victory in Britain's Grand National. Smaller peers William Hill and GVC were also in the red.
Wins for favourites generally tend to mean a major hit for bookies in on the UK's biggest horse race of the year, although William Hill had said it made a profit on Sunday while Paddy Power played down the impact on its financials.
At home, Britain's upper house of parliament was expected to pass a law later on Monday evening that would force Prime Minister Theresa May to seek a delay to the country's departure from the European Union and prevent a disorderly exit on April 12.
May is still trying to persuade the Labour Party to agree to a divorce deal, two days before an emergency EU summit where she will try to delay the exit date.
Biggest midcap faller was specialist tourism and insurance firm Saga, which slumped 10 percent to an all-time low after UBS cut its rating, followed by luxury carmaker Aston Martin with an 8 percent drop after Deutsche Bank cut its rating.
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