Stock markets, pound subdued as UK triggers Brexit request

World stock markets were subdued yesterday as Britain triggered the start of its exit from the European Union, a formal step that kicks off two years of negotiations that will have wide-ranging consequences for business in the region.

KEEPING SCORE: Britain’s FTSE 100 was faring worst in Europe, dropping 0.4 percent to 7,317. Germany’s DAX climbed 0.4 percent to 12,200 and France’s CAC 40 added 0.1 percent to 5,050. U.S. stocks were poised to open higher. Dow and S&P 500 futures were flat.

BREXIT: British Prime Minister Theresa May triggered Article 50 of the EU’s treaty, meaning it begins talks on how to exit the bloc and on creating a new trade relationship. Though no more details on the talks were revealed yesterday, the issues to be discussed over two years will affect business: from tariffs to economic cooperation. The pound was down ahead of May’s formal announcement, but recovered slightly after that, to trade down 0.1 percent on the day at USD1.2434.

QUOTEWORTHY: “While it is certain that today will go down in history as the day the U.K. decided to start an irreversible Brexit process that will terminate its 44-year-old membership with the EU, the outcome remains an uncertainty that may leave investors on edge,” said Lukman Otunuga, analyst at foreign exchange trader FXTM.

CONFIDENCE RISING: Supporting investors’ moods earlier in the day was more evidence that the U.S. economy, the world’s biggest, continues to strengthen. The Conference Board’s consumer confidence index rose in March to its highest level since 2000, in an upbeat sign of consumers’ future expectations. Also, U.S. home prices in January jumped at the fastest pace in nearly 2½ years because the tightening supply of houses for sale sparked bidding wars in many cities.

ASIA’S DAY: Tokyo’s benchmark Nikkei 225 index edged up 0.1 percent to close at 19,217.48 while South Korea’s Kospi rose 0.2 percent to 2,166.98. Hong Kong’s Hang Seng added 0.2 percent to 24,392.05, but the Shanghai Composite index lost 0.4 percent to 3,241.31. Australia’s S&P/ASX 200 rose 0.9 percent to 5,873.50.

CURRENCIES: The dollar strengthened to 110.89 yen from 110.57 yen. The euro fell to $1.0756 from $1.0810.

ENERGY: Benchmark U.S. crude oil futures rose 20 cents to $48.57 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 64 cents on Tuesday. Brent crude, used to price international oils, climbed 24 cents to $51.57 a barrel in London. Kelvin Chan, Hong Kong, AP