UKX FTSE 100 Index

By Sara Sjolin, MarketWatch

U.K. services PMI slumps to 38-month low

U.K. stocks broke a three-day losing run on Thursday, as a round of upbeat earnings results and a rally in oil prices offset a lackluster reading on the country's services sector.

After a choppy session, the FTSE 100 index rose 0.1% to end at 6,117.25, crawling back from an almost one-month closing low reached on Wednesday.

Earnings boost: Shares of BT Group PLC (BT.A.LN) (BT.A.LN) topped the list of gainers on Thursday. The stock rose 2.6% after the U.K. telecom company's fourth-quarter earnings improved (http://www.marketwatch.com/story/bt-group-sees-profit-boosted-by-sports-channels-2016-05-05), boosted by broadband services and sports channels.

Shares of Wm. Morrison Supermarkets PLC (MRW.LN) climbed 2.4% after the grocer reported a 0.7% rise in first-quarter like-for-like sales (http://www.marketwatch.com/story/wm-morrison-supermarkets-same-store-sales-rise-2016-05-05), excluding fuel. That was its second consecutive quarter of sales growth.

RSA Insurance Group PLC (RSA.LN) gained 2%. The insurer said operating and net profits for the first quarter were strong and ahead of its expectations (http://www.marketwatch.com/story/rsa-insurance-says-profit-ahead-of-views-2016-05-05).

IMI PLC (IMI.LN) added 0.9% after the specialist engineering company reiterated its full-year outlook (http://www.marketwatch.com/story/imi-backs-outlook-as-tough-conditions-continue-2016-05-05) amid continuing challenging economic conditions.

On a more downbeat note, shares of Centrica PLC (CNA.LN) slumped 9.8% after the energy supplier said it plans to raise around GBP750 million ($1.09 billion) (http://www.marketwatch.com/story/centrica-to-raise-109-billion-from-share-offer-2016-05-05) from a private placement of shares to fund two acquisitions and pare debt in light of mounting pressure on its credit rating.

Rolls-Royce Holdings PLC (RR.LN) (RR.LN) dropped 2.3% after the aircraft engine maker signaled its first-half results would only be close to break-even.

Commodity rally: Oil companies were also among big gainers, tracking advances for oil futures. West Texas Intermediate crude oil jumped almost 3% (http://www.marketwatch.com/story/oil-prices-rise-as-canadian-wildfire-threatens-output-2016-05-05) to $45.08 a barrel, while Brent rose 2.5% to $45.75.

Read:How a raging inferno in Alberta is hobbling oil production (http://www.marketwatch.com/story/how-a-raging-inferno-in-alberta-is-hobbling-oil-production-2016-05-05)

Oil major Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) rose 1.3%, while BP PLC (BP.LN) (BP.LN) put on 0.8%. Outside the main benchmark, Tullow Oil PLC (TLW.LN) jumped 6.1%.

Most major metals rose, with only copper mired in red. Mining giant BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) gained 0.8%, coming back slightly from a 5.8% slide on Wednesday (http://www.marketwatch.com/story/ftse-100-on-track-for-third-straight-loss-as-bhp-sainsburys-weigh-2016-05-04).

Economic news: The Markit/CIPS purchasing managers index for the U.K. services industry showed activity slumped to a 38-month low in April, down to 52.3 from 53.7 in March. Markit said the firms in the survey commented on prevailing economic uncertainty, partly linked to the Brexit referendum on June 23.

Economists polled by FactSet had expected a reading of 53.5.

"Today's disappointing U.K. services PMI wraps up a hat-trick of weak numbers this week, providing the clearest indication yet that U.K. growth is moving in the wrong direction in Q2," said Joshua Mahony, market analyst at IG, in a note.

"With the services sector making up 79% of U.K. GDP, today's three-year low for the services PMI indicates that not only will expectations of growth be lower, but the chance of a 2016 rate hike just fell further," he added.

The pound seesawed after the data, but was flat around $1.4501 at the time of the European market close.

(END) Dow Jones Newswires

May 05, 2016 12:06 ET (16:06 GMT)

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