LONDON MARKETS: FTSE 100 Drags, Headed For Weekly Loss
May 06 2016 - 9:51AM
Dow Jones News
By Carla Mozee, MarketWatch
Pound still falls vs. dollar after disappointing U.S. jobs
data
Stocks in the U.K. fell Friday, as shares of InterContinental
Hotels Group PLC came under pressure after a trading update, and as
investors rounded off what's set to be a losing week for
equities.
The FTSE 100 was down 0.6% at 6,078.76, with only the utilities
sector registering a gain, according to FactSet data.
Among decliners, Inmarsat PLC (ISAT.LN) shares sank 5.9%,
building on Thursday's 7.2% slide after the satellite company cut
its full-year sales outlook
(http://www.marketwatch.com/story/inmarsat-cuts-revenue-guidance-on-energy-slowdown-2016-05-05).
Commodity shares were also in the red, with oil majors BP PLC
(BP.LN) (BP.LN) and Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) lower
as oil prices struggled. BP lost 1.2% and Shell shed 1.4%.
The FTSE 100 was on course for a 2.7% decline for the
holiday-shortened week. That would mark a third consecutive weekly
loss, and the largest pullback since the week ended Feb. 5,
according to FactSet.
Sterling: Stocks remained lower after U.S. data showed in April,
160,000 new jobs were created
(http://www.marketwatch.com/story/us-gains-160000-jobs-in-april-2016-05-06).
Economists polled by MarketWatch had expected 203,000 nonfarm jobs.
The unemployment rate was unchanged at 5%, as more people dropped
out of the labor force, the government said.
The dollar fell against most rivals after the report, but still
gained against the pound. Sterling was down 0.5% at $1.4426.
"The pound is suffering from a few things. U.K. data this week
have been poor, with services, construction and manufacturing PMIs
all missing expectations and that's showing the cooling effect the
referendum is having on the economy already," said James Ruddiman,
London-based head of foreign exchange advisory of Audere
Solutions.
Ruddiman's referring to a June 23 election asking Britons
whether the U.K. should cut membership ties with the European
Union, the risk of which has been dubbed Brexit.
Also, the Bank of England's quarterly inflation report is due
next Thursday, "and that's likely to be dovish given the data in
recent weeks ... and that's another reason to keep the pound down,"
Ruddiman said. The Bank of England isn't likely to raise interest
rates this year, he said.
Movers: Meanwhile, shares of InterContinental Hotels (IHG) fell
1%. The owner of the Holiday Inn, Crowe Plaza and other hotel
chains said the earlier timing of the Easter holiday "had an
adverse impact across the industry, especially in the Americas and
Europe, which we expect to reverse in Q2." First-quarter global
revenue per room rose 1.5%, said IHG.
IHG had a "slow start to 2016," said analysts at Numis in a
note. "In our view, there is increasing evidence that the U.S.
hotel industry is close to a cyclical peak and that this may
stimulate further consolidation in the sector."
In the mining space, BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU)
shares were down 2%. The mining heavyweight in a Friday statement
said a Brazilian court on Thursday approved a restoration agreement
reached in March with some Brazilian authorities over the deadly
Samarco dam collapse in November.
Earlier
(http://www.marketwatch.com/story/mining-firms-bhp-vale-face-44b-lawsuit-in-brazil-2016-05-03)this
week, federal prosecutors in Brazil
(http://www.marketwatch.com/story/mining-firms-bhp-vale-face-44b-lawsuit-in-brazil-2016-05-03)
filed a civil lawsuit seeking 155 billion reals ($43.84 billion)
for cleanup and remediation from BHP and Vale SA (VALE5.BR)
(VALE5.BR), which run the Samarco joint venture.
(END) Dow Jones Newswires
May 06, 2016 09:36 ET (13:36 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Mar 2024 to Apr 2024
FTSE 100
Index Chart
From Apr 2023 to Apr 2024