By Carla Mozee, MarketWatch
Oil companies lag
LONDON (MarketWatch) -- U.K. stocks dropped to a nearly
four-month low Friday, underpinning losses for the week, during
which investors wrestled with geopolitical tensions and signs of EU
economic weakness.
The FTSE 100 index fell 0.5% to 6,563.19, on track for its
lowest close since April 15, according to FactSet data. The FTSE
also faced a 1.7% decline for the week, a second straight losing
week.
Shares in oil companies fell, not getting any traction from the
gain in oil prices (CLU4). Those gains came after U.S. President
Barack Obama on Thursday authorized targeted airstrikes in northern
Iraq, and after data showed China's oil imports rose in July.
The Pentagon said Friday airstrikes targeting Islamist militants
in Iraq had begun.
Shares of oil major BP (BP) fell 0.8%, BG Group shed 2.4% and
Royal Dutch Shell moved 1.1% lower.
U.K. and other European stocks this week were pulled lower as
investors sought safety in bonds and other so-called safe-haven
assets. The moves came as a trade war between Russia and the West
escalated, with the action expected to hurt the euro-zone more than
any other region.
Closer to home, the U.K.'s Office for National Statistics on
Friday said the country's trade deficit widened in June to 9.4
billion pounds ($15.8 billion) as exports declined more rapidly
than imports. The trade deficit grew with other members of the EU,
but narrowed with countries outside of the currency union. The ONS
also said construction output rose by 1.2% in June from May.
The construction-side gain "may prevent expectations of Q2 GDP
revisions, but the deterioration of the trade balance underscores
an economic headwind," said analysts at Brown Brothers Harriman in
a note Friday.
The pound (GBPUSD) fell to $1.6805, extending losses from
$1.6833 late Thursday.
Advancers on the FTSE 100 included miner Fresnillo PLC , which
climbed 3.5%, and investment services firm Hargreaves Lansdown , up
3.3%.
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