U.K. stocks struggled for direction on Thursday, as investors remained nervous over the potential for a military conflict in Syria and digested the latest Federal Reserve minutes.
What are markets doing?
The FTSE 100 index UKX, +0.08% was marginally higher at 7,259.65, swinging between small gains and losses intraday. The London benchmark on Wednesday lost 0.1%.
The pound GBPUSD, +0.1129% rose to $1.4196, compared with $1.4178 late Wednesday in New York.
What is driving the market?
Geopolitical concerns continued to weigh on investors’ mind, after U.S. President Donald Trump on Wednesday signaled a missile attack on Syria wasn’t far off. The possibility of a U.S. strike against Syrian President Bashar al-Assad has been growing since a suspected government-sanctioned chemical-weapons attack killed civilians in Damascus over the weekend. Russia has warned the U.S. not to launch an attack, saying it’ll shoot down any missiles.
U.K. Prime Minister Theresa May on Thursday summoned her cabinet to discuss whether to back military actions proposed by the U.S. May is prepared to take action without asking parliament first, the BBC reported.
Traders also assessed minutes from the Fed’s March meeting that came out after European markets closed on Wednesday. The minutes showed the rate setters expect U.S. economic growth and inflation to continue to accelerate, underling the need for tighter policy.
Separately, minutes of the European Central Bank’s meeting also suggests the ECB will move only gradually to phase out its 30 billion-euro ($37.1 billion) a month bond-buying program and start raising interest rates.
What are strategists saying?
“Investors are weighing up the erratic geopolitical backdrop with high hopes for earnings growth. Laying beneath the uncertainty is the question of how much support can be expected by central banks if it all goes pear-shaped,” said Jasper Lawler, head of research at London Capital Group, in a note.
“Investors need some good results from U.S. banks which unofficially kick off U.S. earnings season on Friday to restore some confidence,” he added.
Which stocks are in focus?
Shares of Shire PLC SHP, +2.77% SHPG, -1.12% rose 2.2% after a Reuters report that Takeda Pharmaceutical Co. 4502, -1.19% is in talks to secure a loan to buy the U.K. drugmaker.
On a downbeat note, Glencore PLC GLEN, -0.51% GLCNF, -1.22% fell 0.8% after Bloomberg reported that the commodities major has been forced to declare force majeure on some aluminum contracts as a result of the U.S. sanctions against Russian company United Co. Rusal.
GlaxoSmithKline PLC GSK, +0.38% GSK, -1.00% rose 0.2%. Late on Wednesday, Fitch Ratings cut its outlook on the pharma giant to “negative” from “stable,” citing concerns over how GSK will fund its plan to buy a 36.5% stake in Novartis AG NOVN, +0.67% Meanwhile on Thursday, the drugmaker said it has signed a deal to transfer its rare-disease gene-therapy portfolio to Orchard Therapeutics in exchange for a 19.9% stake in the company.
Outside the FTSE 100, Carpetright PLC CPR, -16.57% tumbled by nearly 17% after the retailer said it’ll close 92 stores as part of a “fundamental restructuring.”