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FTSE 100 dips, industrials weak after Boeing 737 output cut

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By Reuters
FTSE 100 dips, industrials weak after Boeing 737 output cut
FILE PHOTO: Traders work at their desks at CMC Markets in London, Britain, January 16, 2019. REUTERS/John Sibley   -   Copyright  JOHN SIBLEY(Reuters)

(Reuters) – Britain’s main index lost ground on Monday after rounding off a solid week while investors awaited fresh updates on the Brexit process, and industrials slipped on a read-across from Boeing cutting 737 aircraft production.

The exporter-heavy FTSE 100, which had scaled six month highs for the most of last week, was down 0.1 percent by 0718 GMT, as a stronger pound also weighed, while the midcaps also dipped by the same amount.

Sterling edged higher as a long extension to UK’s exit date – which currently stands at April 12 if a deal is agreed – is expected and a no-deal prospect has diminished, while investors await a crucial European Union summit on Wednesday.

Melrose was among the biggest losers on the blue-chip index after Boeing, the world’s largest planemaker, on Friday announced plans to slash its monthly production of 737 aircraft by nearly 20 percent.

The output cut followed two deadly crashes and signalled it does not expect aviation authorities to allow the plane back in the air any time soon.

Financial stocks were the biggest drags in early deals, while world’s largest caterer Compass slipped 1.3 percent after a Bernstein rating downgrade.

Among steep fallers on the midcaps was luxury carmaker Aston Martin with a 4.3 percent drop after Deutsche Bank cited Brexit-related uncertainties, global automotive market volatility and cut rating on the stock.

Industrials, led by a 1 percent drop in Meggit after the Boeing production cut, were the biggest drags on the FTSE 250.

Outshining the market was ailing department store chain Debenhams, which surged 13 percent after retailer Sports Direct offered to underwrite a 150 million pound rights issue in exchange for its boss Mike Ashley taking over as CEO.

(Reporting by Muvija M and Yadarisa Shabong in Bengaluru; Editing by Raissa Kasolowsky)