DAILY TRADING STRATEGY

Thursday, Mar 01

UK OVERVIEW
U.K. stocks closed lower Wednesday, finishing up February with a monthly loss, as investors focused on the prospect of rising borrowing costs in the U.S. after comments from new Federal Reserve Chairman Jerome Powell. A slowdown in factory activity in China, a key market for London-listed metals producers, also put pressure on London’s benchmark. The FTSE 100 fell 0.7% to end at 7,231.91. On Tuesday, the London gauge slipped 0.1%. For February, the FTSE 100 gave up 4%. That marked its worst monthly performance since August 2015, according to FactSet. The pound fetched $1.3792, down from $1.3908 late Tuesday in New York, as traders eyed news about a European Union document laying out Brexit terms. It was helping to reignite a debate over Northern Ireland’s future.U.K. blue-chip equities came under pressure, echoing action on European and 
Asian markets, after a selloff in stocks on Wall Street on Tuesday. U.S. stocks were mixed on Wednesday, midway through their session. Those losses came after the Fed’s Powell told congressional lawmakers that the U.S. economic outlook has strengthened since December. 
That was interpreted as a sign the Fed may raise interest rates four times this year, instead of three times as it has previously signalled. Powell will testify before the Senate Banking Committee on Thursday. Persistent worries about higher borrowing rates have unsettled global markets this month, contributing to the FTSE 100’s likely loss for February. Investors focus on U.S. yields and Fed-rate policy, as higher U.S. interest rates tend to drive financial markets globally and as many companies do business in the U.S. Powell’s testimony helped drive the dollar higher, which in turn pressed down on prices of metals denominated in the U.S. currency, such as copper . U.K. stocks of miners dropped Wednesday, tracking that move lower. The mining sector was also under pressure from data showing the pace of growth in China’s manufacturing activity fell sharply in 
February . China is a major buyer of both industrial and precious metals. ITV PLC shares slid 7.6% after the broadcaster’s pretaxprofit of £500 million ($697.1 million) fell short of a FactSet consensus estimate of £558 million. 

Taylor Wimpey PLC shares dropped 4% as the home builder posted a 6.9% fall in 2017 pretaxprofit. Admiral Group PLC shares fell 4.6%. They erased an earlier gain that came as the insurance company announced its 2017 profit rose 45%.

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