UK shares dip as Boeing 737 output cut bruises industrials

Britain’s main index lost ground on Monday after rounding off a solid week while investors awaited fresh updates on the Brexit process, and industrials slipped on a read-across from Boeing cutting 737 aircraft production.

The exporter-heavy FTSE 100, which had scaled six month highs for the most of last week, was down 0.3 percent by 0845 GMT, as a stronger pound also weighed, while the midcaps dipped 0.2 percent.

An index of aerospace and defence stocks lost 0.7 percent after Boeing, the world’s largest planemaker, on Friday announced plans to slash its monthly production of 737 aircraft by nearly 20 percent. The output cut followed two deadly crashes and signalled it does not expect aviation authorities to allow the plane back in the air any time soon.

With Boeing trimming manufacturing and production, there’s going to be lesser demand for products manufactured by Meggitt and Melrose… Fewer planes by Boeing is going to lead to fewer contracts that Meggitt and Melrose have, David Madden, CMC Markets analyst, said.

Source: Civil Aviation Authority