LONDON MARKETS: FTSE 100 Posts Modest Win, But Locks In Weekly Loss
07 May 2016 - 2:40AM
Dow Jones News
By Carla Mozee, MarketWatch
Pound still falls vs. dollar after disappointing U.S. jobs
data
U.K. stocks swung higher Friday, aided by strengthening among
commodity shares, but the British blue-chips benchmark still marked
its worst week in roughly three months.
The FTSE 100 edged up 0.1% to close at 6,125.70.
But for the holiday-shortened week, the index fell 1.9%. That
marked a third consecutive weekly loss, and the largest such
pullback since the week ended Feb. 12, according to FactSet.
Stocks spent much of Friday's session in the red ahead of
closely watched U.S. jobs data. Eventually, the report 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%.
"The non-farm payrolls farm across the Atlantic fell
significantly short of expectations and although this might not be
great news for the U.S. economy, it certainly makes justifying that
next rate increase from the Federal Reserve that much harder," said
Tony Cross, market analyst at Trustnet Direct, in a note.
That data were "bringing about the usual air of uncertainty
which has helped propel precious metals miners higher through the
session," he said.
Shares of Randgold Resources PLC (RRS.LN) vaulted to the top of
the FTSE 100, rising 6.6% as gold prices popped up nearly 2%.
Precious metals miner Fresnillo PLC (FRES.LN) tacked on 6.2%.
Rio Tinto PLC (RIO) (RIO) (RIO) shares picked up 0.9% as the
company said it's headed toward the next stage of development at
the Oyu Tolgoi copper and gold mine in Mongolia.
(http://www.marketwatch.com/story/rio-tinto-progresses-on-mongolia-mine-2016-05-06)
Meanwhile, major oil companies BP PLC (BP.LN) (BP.LN) and Royal
Dutch Shell PLC (RDSB.LN) (RDSB.LN) rose 0.7% and 1%, respectively,
as oil prices turned higher.
Oil futures gained on concerns about disruptions to global crude
output, with a wildfire raging in oil-rich regions of Canada and as
a Chevron-operated offshore oil facility in southern Nigeria was
attacked.
But 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).
Sterling: The U.S. dollar fell against most rivals after the
jobs report, but still gained against the pound. Sterling was down
0.4% at $1.4438.
"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,"
he said. The Bank of England isn't likely to raise interest rates
this year, he added.
Movers: Meanwhile, shares of InterContinental Hotels (IHG) fell
0.5%. The owner of the Holiday Inn Crowne 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 fought off losses to end higher by 1.6%. The mining
heavyweight in an early 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 12:25 ET (16:25 GMT)
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