By Carla Mozee, MarketWatch
Pound falls on BOE economist's rate comments
LONDON (MarketWatch) -- U.K. stocks turned lower Thursday, with
Next PLC shares dropping from their all-time high after the apparel
retailer took a cautious tone in its financial update.
The FTSE 100 lost 0.2% to 6,930.87, in part as consumer-goods
shares fell into the red. The index had earlier been cruising above
its record high of 6,961.14
(http://www.marketwatch.com/story/ftse-100-wobbles-as-aviva-rises-admiral-falls-boe-statement-on-tap-2015-03-05).
On Wednesday, the FTSE 100 rallied after the governing U.K.
coalition outlined its 2015 budget plans.
On Thursday, apparel retailer Next PLC was at the bottom of the
FTSE 100. Shares fell 3.6% as the company said it remains "very
cautious in our sales budgets"
(http://www.marketwatch.com/story/next-cautious-for-current-year-despite-profit-rise-2015-03-19-44851037)
although the consumer economy looks benign. "Whilst we are happy
with most of our current product ranges, we recognize that some
collections are not as strong as they were at this point last
year," Next said in a statement.
Full-year profit at Next rose to 634.9 million pounds ($936.5
million) from GBP553.2 million a year ago. Sales in the most recent
period rose to GBP4 billion from GBP3.74 billion.
Next shares closed at an all-time high on Wednesday at GBP76.20,
according to FactSet data.
Credit Suisse said Next's comments about its sales budgets and
collections "is a surprise" as it had only "expected the tone of
the outlook statement to be somewhat muted in terms of the UK macro
outlook, but not on execution." The broker said it remains neutral
on Next.
Retailer Marks & Spencer PLC , whose offerings include
apparel and accessories, was up 2.2%.
Also pulling lower on Thursday was British American Tobacco PLC
, falling 1.3% as its shares traded without dividend rights.
But advancers on the blue-chip index included mining shares,
benefitting as metals prices moved higher in the wake of an
overnight drop in the dollar (DXY) . Shares of miner Fresnillo PLC
rose 5.1%, Randgold Resources Ltd. gained 3% and Antofagasta PLC
rose 1.8%.
The dollar has dropped as investors were considering the Federal
Reserve's policy statement and the prospect that U.S. interest
rates may stay low for longer period. The dollar has recovered
ground against major rivals on Thursday
(http://www.marketwatch.com/story/dollar-recoups-some-post-fomc-losses-against-yen-euro-2015-03-19).
Meanwhile, the pound (GBPUSD) fell below $1.48 after the Bank of
England's Chief Economist Andrew Haldane suggested a rate cut may
be needed to fend of the risks of deflation. The pound was buying
$1.4759, down from $1.4980 late Wednesday.
If a policy change "were required, given the asymmetry of
inflation risks, I think the chances of a rate rise or cut are
broadly evenly balanced," Haldane said in prepared remarks for a
speech at the Biz Club in Rutland. "In other words, my view would
be that policy may need to move off either foot in the immediate
period ahead, depending on which way risks break."
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