The FTSE proved surprisingly resilient this morning, first plunging on opening but then moving higher despite a slew of negative news from the UK’s blue chips and the launch of a money laundering investigation into Dutch bank ABN AMRO.
Shares in publishing house Pearson sank over 16% after the company warned it expects lower profits from US education literature. British Airways parent International Consolidated Airlines and tobacco firm Imperial Brands also dropped in early trade, 3% and 9% respectively, following profit warnings from both companies.
IAG echoed some of the issues that led to the demise of the Thomas Cook travel company earlier this week but pointed the main finger of blame at pilot strikes which cost the company EUR137 million.
But this is relatively mild compared to the troubles of ABN AMRO which is now being investigated for financing of terrorism and money laundering. In a similar case last year Dutch peer ING was found guilty and fined EUR775 million.
On the FTSE, banks, telecoms, retailers and resources companies are providing some counterbalance to the beleaguered Pearson and IAG while some support is coming from positive noises from China about the Sino-US trade relations.
Pound lower with clock ticking on Brexit
The pound is a touch weaker a day after Parliament has gone back into session following the Supreme Court’s ruling that the prorogation was illegal. Apart from the bile exchanged among the MPs it is not clear how things will move forward on the Brexit front. The ball it seems is in the Prime Minister’s court and speculation about what Mr Johnson will do next ranges from resigning to shutting down Parliament one more time.
The euro is holding against the dollar but is beginning to slightly weaken after the unexpected resignation of a senior member of the European Central Bank. The decision could spell trouble ahead as Sabine Lautenschläger, one of the bank’s six-member executive board, decided to leave in a policy dispute over the ECB’s September decision to restart a massive bond-buying programme.