LONDON MARKETS: FTSE 100 Ends Lower, But Carnival, EasyJet Post Sharp Gains
By Sara Sjolin and Victor Reklaitis, MarketWatch
British pound rises to 2-month high versus euro
U.K. stocks on Tuesday closed lower for a second straight session, with analysts saying an escalating war of words between the U.S. and North Korea helped push investors out of risky assets.
But Carnival PLC and easyJet PLC were among the day's gainers, helped by better-than-expected earnings and acquisition-related buzz, respectively.
The FTSE 100 index fell 0.2% to end at 7,285.74, building on a 0.1% loss from Monday (http://www.marketwatch.com/story/ftse-100-under-pressure-as-european-political-uncertainty-lifts-the-pound-2017-09-25).
Late in Monday's session, North Korea's foreign minister claimed the U.S. had declared war on the isolated state (http://www.marketwatch.com/story/north-korean-official-says-us-has-declared-war-2017-09-25-13103598), leaving Pyongyang with "every right to make countermeasures." That includes the right to shoot down U.S. strategic bombers, the foreign minister said.
The claim "may seem ludicrous, however, the claim that they reserved the right to shoot down U.S. bombers in international airspace should be taken seriously as the North Koreans do have form in this area for provocation," said Michael Hewson, chief markets analyst at CMC Markets UK, in a note.
U.K. stocks on Tuesday were also hurt by strength in the pound, which rallied to its highest level against the euro since July. Sterling rose as high EUR1.1423, and it was recently around EUR1.1402, up from EUR1.1367 late Monday in New York. But against the dollar, the pound traded at $1.3419, down from $1.3469 on Monday, as earlier gains evaporated.