U.K. blue-chip stocks closed lower Friday in a broader selloff across European equities, with investors preparing for what’s likely to be a tense gathering of leaders in the Group of Seven advanced economies in Quebec.
Meanwhile, BT Group PLC was in focus on news that the telecom company’s chief executive, Gavin Patterson, will be leaving the company.
How markets are performing
The FTSE 100 index
fell 0.3% to close at 7,681.07, ending 0.3% lower for the week. That marks a third consecutive weekly fall.
What’s driving markets
U.K. and continental European stock indexes
were splashed in red as tensions flared-up Thursday between U.S. President Donald Trump and American allies Canada and the European Union before the start of the G-7 summit in Charlevoix, Quebec, on Friday.
The sniping was unnerving to investors as fears of a global trade war have been running through financial markets since March, when Trump said he’d slap tariffs on aluminum and steel imported into the U.S., moves he claimed would protect U.S. steelmakers.
“The six countries of the G-7 without the United States are a bigger market taken together than the American market. There will be no world hegemony if we know how to organize ourselves. And we don’t want there to be one,” French President Emmanuel Macron said Thursday in Ottawa, flanked by Canadian Prime Minister Justin Trudeau. Macron followed up his sentiments on Twitter.
Trump responded to Macron then sent out other tweets that took aim at Trudeau and the European Union:
Why isn’t the European Union and Canada informing the public that for years they have used massive Trade Tariffs and non-monetary Trade Barriers against the U.S. Totally unfair to our farmers, workers & companies. Take down your tariffs & barriers or we will more than match you!
— Donald J. Trump (@realDonaldTrump) June 8, 2018
What strategists are saying
“With new U.S. tariffs now lodged against all but one of the remaining six [G-7] members and Trump tweeting his still combative mood overnight, some leaders might be wondering if there might be more productive ways to spend their time this weekend,” said Ken Odeluga, market analyst at City Index, in a Friday note.
“At worst, the main outcome the summit could generate is further rancor on trade and, ultimately, escalation of the conflict which has already seen a rapid proliferation of retaliatory tariffs. Unsurprisingly, then, risk proxies were on the rise,” he said, noting gains for the Swiss franc against the euro
and the dollar
among flight-to-safety moves in financial markets.
The U.K., France, Germany, Italy, Canada, Japan and the U.S. are the G-7’s members and their summit runs through Saturday.
BT Group PLC shares
closed up 1% after the telecom company said Chief Executive Gavin Patterson will step down later this year after five years in the role. BT also said it’s started a search for his successor.
“Since 2016, BT’s share-price graph resembles something of a black run; pretty much always on a downward trend and with a few nasty cliffs here and there,” wrote Hargreaves Lansdown equity analyst George Salmon. “Shareholder confidence has followed the share price down, and with BT embarking on a crucial restructure, the board has decided it’s time for a change,” he said in a note.
Shares of Standard Life Aberdeen PLC
sank 3.6% after Lloyds Banking Group PLC sold its remaining 3.3% stake in the investment company for £344 million ($461.6 million). Lloyds shares