London stocks slid yesterday, bucking gains elsewhere, after Britain’s opposition Labour Party vowed to nationalise parts of telecoms giant BT and offer free broadband internet in an eye-catching election promise.
Labour leader Jeremy Corbyn, hitting the campaign trail in the city of Lancaster in north-western England, said he would bring the parts of BT that deal with broadband into public ownership as part of a sweeping programme of nationalisations.
BT shares dived 3.7 per cent in morning deals but then later recovered somewhat, while dealers digested news that BT’s broadcasting division had been awarded exclusive broadcast rights to UEFA’s European football matches until 2024.
Corbyn is seeking to seize the initiative from Prime Minister Boris Johnson’s Conservative Party ahead of the December 12 election that has been dominated so far by Brexit.
Corbyn proposes to privatise BT’s Openreach division, which runs almost all of Britain’s existing digital network, and other elements of the firm to create a new public entity, British Broadband.
Labour estimates the plan will cost some £20.3 billion (23.7 billion euros, $26.1 billion), but some analysts were quick to pour cold water on the plans.
In afternoon deals, BT stock was down two percent on London’s benchmark FTSE 100 index, which was 0.3 per cent weaker overall.
Stock markets in the rest of the world mostly banked higher on resurgent trade war optimism, dealers said.
Asian indices mainly rose as trade hopes were given a boost by US President Donald Trump’s economic aide saying “enormous progress” had been made in talks with China, easing recent concerns that they were stumbling.
The gains came after top White House adviser Larry Kudlow said that the long-awaited mini trade deal with China was on track as part of a wider pact.
His comments follow a week of unease about the much-vaunted talks, after Trump dismissed Chinese claims of a plan to roll back tariffs as the negotiations progress, while reports said Beijing was uneasy about some aspects of the developing deal.
Eurozone stocks were happy to take Asia’s optimistic lead to trade modestly firmer in the afternoon.
Wall Street opened higher, too, as Kudlow’s comments gave optimistic traders an incentive to buy.
In Santiago de Chile, meanwhile, stock prices rose more than six per cent after political parties agreed to hold a constitutional referendum, a key demand of protesters to resolve weeks-long unrest.
Chile’s peso rose against the dollar, also boosted by the government’s promise to hold a referendum to change the country’s dictatorship-era constitution.