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European stock markets advance; pound slides


AFP London
European stock markets climbed Friday, led by London as the pound hit near four-week lows against the dollar.
Earlier, Asian equities closed lower following declines Thursday on Wall Street where the impeachment inquiry into US President Donald Trump weighed on sentiment.
"The pound has tanked... as Bank of England member Michael Saunders opened the door to a rate cut by the central bank," said Fiona Cincotta, senior market analyst at City Index trading group.
"Policy maker Michael Saunders said that the BoE may cut rates as the next move even in the case that a disorderly Brexit is avoided.
"The comments from Saunders highlight the marked weakening of the UK economy over recent quarters; dragged down not only by Brexit uncertainty but also softer global growth," Cincotta added.
The pound fell to USD 1.2271, the lowest point in nearly four weeks.
As has often been the case, the weaker sterling on Friday pushed up share prices of multinationals listed on London's benchmark FTSE 100 index.
The likes of Shell and BP earn a large bulk of their earnings in dollars.
British Prime Minister Boris Johnson on Thursday suffered yet another setback after MPs rejected a request to briefly suspend business for his Conservative party's conference, highlighting the hostility he faces in parliament just weeks before Brexit.
In commodities trading Friday, crude prices slipped following the swift recovery in Saudi production that slumped in the wake of attacks on its oil infrastructure two weeks ago.
"The market has been trading lower as oil bulls have been discouraged by quicker-than-expected return of Saudi oil output," said Stephen Innes, Asia Pacific market strategist at AxiTrader.
Meanwhile, the British-flagged oil tanker Stena Impero, which had been held off the Iranian port of Bandar Abbas for more than two months, set sail and reached international waters Friday, its Swedish owner said.
The ship's seizure was widely seen as a tit-for-tat move after authorities in the British overseas territory of Gibraltar detained an Iranian tanker on suspicion it was shipping oil to Syria in breach of EU sanctions.
Elsewhere, investors were awaiting key US data Friday, including on inflation.
"With the US consumer, the last man standing still to take cover from the global slowdown, a poor read from these numbers has the potential to floor equities and end the week on a sour note," said Jeffrey Halley, senior market analyst at OANDA.

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First Published: Sep 27 2019 | 8:25 PM IST

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