Sterling plunges as May signals possibility of hard Brexit

Traders offload sterling after UK prime minister calls on EU to produce fresh proposals

Sterling plunged more than 1 per cent against the euro to close at €1.113. Photograph: Phil Noble/Reuters

Sterling plunged more than 1 per cent against the euro to close at €1.113. Photograph: Phil Noble/Reuters

 

Investors fled sterling after British premier Theresa May signalled that the UK could depart the European Union without a deal, potentially locking it out of the world’s biggest trade bloc.

Sterling plunged more than 1 per cent against the euro to close at €1.113. Britain’s currency surrendered days of gains on the US dollar to tumble 1.5 per cent and hit $1.307.

Traders offloaded sterling after Ms May called on the EU to come forward with fresh proposals on Northern Ireland and trade, warning that without a move from Brussels it would not be possible to make further progress in Brexit talks.

Speaking after the EU humiliatingly rejected her Brexit plans at a summit in Salzburg, Ms May claimed that talks were at an “impasse”.

Meanwhile, European shares rose, cementing recent advances for the region’s indices.

DUBLIN

Traders said the Irish market was quiet. Bank of Ireland shed 1.56 per cent to €7.28 after investors offloaded more than 3.45 million of the lender’s shares.

Rival AIB fared slightly better, inching up 0.84 per cent to €4.814. Mortgage specialist Permanent TSB climbed 2.78 per cent to €2.22.

Hotel group Dalata tumbled 2 per cent to €6.79 on trades totalling more than 320,000 shares.

Energy business Greencoat Renewables climbed 2.89 per cent to €1.07 as 680,000 of its shares changed hands.

LONDON

Food delivery service and gig economy pioneer Just Eat tumbled as much as 9 per cent to a 12-month low of 644.20 pence sterling on news that its rival Deliveroo could fall into the hands of ride-sharing service Uber.

Analysts responded to the news by saying that an Uber-Deliveroo combination could created a “killer brand” that could hit Just Eat’s market share.

“They say strength in numbers can be powerful so it is no surprise that Just Eat’s shares have taken a big hit on speculation that Uber is going to buy Deliveroo,” said Russ Mould, investment director at brokers AJ Bell.

Just Eat pared back some of the losses in later trading but still ended the day 4.8 per cent down at 674p.

Moss Bros was hit as the menswear retailer warned over profits after hot summer weather and the World Cup “distraction” pushed the firm to a half-year loss.

Earnings show the retailer swung to a pretax loss of £1.7 million for the six months to July 28th, having posted a profit of £3.9 million in the same period last year. Shares closed down 14 per cent at 40p.

Shares in British industrial technology firm Smiths fell 4.4 per cent to 1,520.5p after its full-year profit missed analysts’ estimates.

Builder Barratt Developments was down 17p at 560p and rival Persimmon dipped 68p to 2,366p.

EUROPE

The pan-European Stoxx 600 rose 0.4 per cent, while the Euro Stoxx 50 ended up 0.8 per cent. Both have had 10 straight sessions of gains.

The last time the Stoxx 600 performed so strongly was in September last year, but for the Euro Stoxx 50 it was the longest winning streak since 1997.

Belgium’s Nyrstar tumbled more than 30 per cent after it issued a profit warning, saying revenues would be hurt by adverse market conditions. German retailer Metro jumped 2.3 per cent as Czech investor Daniel Kretinsky is buying more shares in the company, stoking speculation of a full bid.

US

The S&P 500 and the Dow touched record highs for the second straight day, while the tech-heavy Nasdaq dipped in heavy trading on Friday, largely related to Wall Street’s sector reshuffling.

AT&T rose 1.8 per cent, pushing the S&P telecommunications sector higher by 1.42 per cent. Shares of Verizon climbed 1.1 per cent and CenturyLink gained 1.6 per cent.

McDonald’s 2 per cent rise lifted the consumer discretionary sector after the company ended a week marked by strikes across the country over workplace sexual harassment by raising its quarterly dividend by 15 per cent to $1.16.

A 3 per cent drop in shares of Micron led chipmakers lower after the Idaho-based firm said US tariffs on Chinese goods would weigh on its financial results for as much as a year. Additional reporting: – Reuters