LONDON MARKETS: Oil Rally Lifts U.K. Stocks For The First Time In Four Days
May 05 2016 - 5:59AM
Dow Jones News
By Sara Sjolin, MarketWatch
U.K. services PMI slumps to 38-month low
U.K. stocks were set to break a three-day losing run on
Thursday, as a round of upbeat earnings results and a rally in oil
and metals prices offset a lackluster reading on the country's
services sector.
The FTSE 100 index rose 0.6% to 6,148.70, crawling back from an
almost one-month closing low reached on Wednesday.
Earnings boost: Wm. Morrison Supermarkets PLC (MRW.LN) topped
the list of gainers on Thursday, rising 3.9% 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.
Shares of BT Group PLC (BT.A.LN) (BT.A.LN) rose 3.3% 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.
RSA Insurance Group PLC (RSA.LN) gained 2.1%. 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) gained 3.2% 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, Centrica PLC (CNA.LN) slumped 7.4%
after the energy supplies 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.
Commodity rally: Oil and miners were also among big gainers,
tracking advances for energy and metals. West Texas Intermediate
crude oil jumped more than 3%
(http://www.marketwatch.com/story/oil-prices-rise-as-canadian-wildfire-threatens-output-2016-05-05)
to $45.22 a barrel, while Brent rose 2.7% to $45.81.
Most major metals rose, with only copper mired in red.
Mining giant BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) gained
2.1%, coming back 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).
Among other miners, Glencore PLC (GLEN.LN) (GLEN.LN) added 1.7%
and Rio Tinto PLC (RIO) (RIO) (RIO) picked up 0.8%.
Oil major Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) rose 0.9%,
while BP PLC (BP.LN) (BP.LN) put on 1.2%. Outside the main
benchmark, Tullow Oil PLC (TLW.LN) jumped 6.4%.
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, buying $1.4503 at the latest,
up from $1.4496 late Wednesday in New York.
(END) Dow Jones Newswires
May 05, 2016 05:44 ET (09:44 GMT)
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