LONDON MARKETS: FTSE 100 Wobbles After Retail Sales, On Course For Worst Week In 5 Months
April 21 2017 - 5:35AM
Dow Jones News
By Carla Mozee, MarketWatch
Rio Tinto rallies after upgrade
U.K. blue-chip stocks on Friday darted between small gains and
losses, keeping the benchmark FTSE 100 on track for its worst
weekly performance in five months, but Rio Tinto PLC led gains in
the key mining sector.
The market found little relief from a drop in the pound after
March retail sales data missed the mark.
The FTSE 100 index was off 2 points at 7,116.17, feeling the
weight of losses among consumer, utility and oil and gas shares.
But the basic materials and financial sectors advanced.
European stocks were also dipping into negative territory
(http://www.marketwatch.com/story/french-stocks-slide-after-paris-attack-fuels-election-uncertainty-2017-04-21).
"Trading sentiment is increasingly cautious in front of Sunday's
first round of voting for the French presidential election that is
too close to call," said Richard Perry, market analyst at Hantec
Markets, in a note. "With so many variables according to the polls,
traders do not appear willing to take a view in front of Sunday's
vote and the volatility is likely to be seen early next week."
For the Easter holiday-shortened week, the London benchmark was
on track for a 2.9% drop, which would be its biggest percentage
decline since early November, FactSet data showed. Stocks this week
were clipped by the pound's jump above $1.28, which came after U.K.
Prime Minister Theresa May unexpectedly called a snap general
election for June 8.
Read:Why the snap U.K. election is a 'game changer' for the
pound
(http://www.marketwatch.com/story/heres-why-the-pound-surged-to-10-week-high-after-may-called-snap-uk-election-2017-04-18)
And see:What's a 'snap election' and why does Theresa May want
one?
(http://www.marketwatch.com/story/whats-a-snap-election-and-why-does-uk-prime-minister-theresa-may-want-one-2017-04-18)
A stronger pound puts pressure on the FTSE 100's multinational
companies that make the bulk of their earnings and revenue from
overseas markets.
On Friday, shares of Reckitt Benckiser Group PLC (RB.LN) (RB.LN)
were at the bottom of the index, down 1.9%. The consumer goods
company, whose brands include Air Wick and Lysol, posted
first-quarter revenue of 2.64 billion pounds
(http://www.marketwatch.com/story/reckitt-benckiser-revenue-boosted-by-forex-rates-2017-04-21)($3.31
billion), up 15% considering foreign exchange rates.
But excluding the impact of changes in exchange rates,
like-for-like revenue was unchanged. The comparison was the
"toughest" for the year, given a rise of 5.2% in the first quarter
of 2016, said Liberum analysts in a note.
But pushing higher were shares of Rio Tinto PLC (RIO) (RIO)
(RIO), up 2.3% following an upgrade for the iron ore producer at
BNP Paribas. Analysts are questioning whether a recent selloff in
iron ore is overdone and are suggesting Rio Tinto shares are worth
consideration for buying, Barron's wrote Friday
(http://blogs.barrons.com/asiastocks/2017/04/21/iron-ore-selloff-is-overdone-time-to-buy-rio-tinto/).
Rival BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) rose 1.5% as
the company said it's embarking on a $204 million expansion of its
coking-coal operations in eastern Australia
(http://www.marketwatch.com/story/bhp-billiton-plans-204m-expansion-of-coal-mine-2017-04-20)
to increase production and reduce operating costs.
Other mining shares rose, with Antofagasta PLC (ANTO.LN) up 2.1%
and Glencore PLC (GLEN.LN) higher by 1.7%.
The mining group makes up nearly 7% of the FTSE 100's
weighting.
Economic data: The pound dropped to an intraday low of $1.2782
after U.K. retail sales figures widely missed expectations. March
sales rose 1.7% year-over-year, the Office for National Statistics
said, confounding expectations for a 3.7% increase
(http://www.marketwatch.com/story/uk-retail-sales-fall-sharply-in-march-2017-04-21).
Sales month-over-month fell by 1.8%, also missing expectations.
(END) Dow Jones Newswires
April 21, 2017 05:20 ET (09:20 GMT)
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