The UK's leading stock index closed the session slightly higher on Friday, but the benchmark recorded the highest weekly percentage drop as investors found little reason to be confident over the weekend with a number of major uncertainties policies in the air.
In addition to recent concerns about Turkey's currency crisis, the possibility of a so-called hard Brexit has returned to the forefront of investor sentiment. Market participants fear that the next phase of talks for the British in the lengthy negotiations to exit the European Union will result in the blocking of the block without a definite trade agreement.
How markets are going
The FTSE 100
UKX, + 0.03%
rose less than 0.1% to close at 7.558.59. For the week, it fell by 1.4% in its biggest decline since the week ended March 23, according to FactSet data.
The British pound
GBPUSD, + 0.1416%
was slightly higher than the dollar, buying $ 1.2737, compared to $ 1.2712 on Thursday in New York.
What is moving the markets
London mayor Sadiq Khan reported to city officials to begin preparations for a Brexit no-deal to determine if the city could face any shortages of medicines and food, emphasizing the concerns that continued negotiations between the EU and Great Britain could prove fruitless.
Khan in a Guardian article accused the government of "dragging their feet" and leaving EU citizens in limbo.
Meanwhile, UK Foreign Secretary Jeremy Hunt, speaking in the Netherlands, told ITV News that the UK would "find a way to thrive and prosper" in the event of a failed agreement, but said that it would represent a "huge geo-strategic" error. "
In addition, volatility in the commodity sector was a major source of concern, with the sector having been pressured by concerns about global trade and a possible knock-on effect on emerging markets from rotations in Turkey
USDTRY, + 3.7616%
one of the market's most recent underperformers, fell 1.9% as the largest percentage decliner on Friday. So far in August, it has lost almost 20% of its value.
These issues have obscured some positive economic news. A July UK retail sales report showed a 3.5% monthly increase compared to the expected 2.6% gain. Excluding fuel, they increased by 3.7%, above the consensus forecast of 3.0%.
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What do the strategists say?
"Traders will watch carefully for headlines indicating UK probability" Stop outside Europe without an agreement, "said Jasper Lawler, head of research at London Capital Group.
Marios Hadjikyriacos , an investment analyst at the XM brokerage, in a research note on Friday said "the British pound barely advanced, largely unable to capitalize on strong retail sales figures in the United Kingdom. All eyes remain on the Brexit talks, where we could get some new comments today. "
" The continued lack of progress could confirm the current pessimistic narrative and thus keep the currency at current low levels, or even trigger further moderate losses. On the contrary, any clue that the negotiations are moving forward can be a positive surprise, leading to an exaggerated rebound, "he added.
Among the notable gainers, RSA Insurance Group
RSA, + 1.59%
concluded the 1.7% while British American Tobacco
BATS, + 1.08%
closed by 1.2% more.
On the downside, Next Plc
lost the 1.1% and Standard Charter Plc
closed at 0.9%.
Shares of the PLC Group of the Royal Bank of Scotland
RBS, + 0.12%
closed 0.1% after being updated by the analysts of the HSBC banks.
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