LONDON MARKETS: FTSE 100 Seeks Firm Direction, But On Course For 7th Weekly Advance
11 May 2018 - 9:44PM
Dow Jones News
By Carla Mozee, MarketWatch
Zoopla owner in takeover deal for nearly $3 billion
U.K.'s blue-chip stocks wavered Friday, appearing ready to press
pause after reaching their highest in more than three months, but
the market was still set to rise for a seventh straight week.
Rounding off the week in the U.K. was a takeover deal of ZPG
PLC, the owner of property website Zoopla, for more than GBP2
billion.
How markets are moving
The FTSE 100 index was down 2.3 points to 7,699.26, led lower by
the utility and health care groups. But the basic materials and
industrial sectors advanced. The benchmark on Thursday rose 0.5%
(http://www.marketwatch.com/story/ftse-100-rises-as-rbs-jumps-after-doj-settlement-2018-05-10)
For this week, the London benchmark was looking at a gain of
1.7%. A seventh week of advances would be the longest run of wins
since the week ended Jan. 12, FactSet data showed.
The pound traded at $1.3567, up from $1.3519 late Thursday in
New York. Against the euro, sterling bought EUR1.1359 compared with
EUR1.1345 in the prior session.
What's driving markets
The FTSE 100 has been switching between small falls and rises on
Friday, looking for firm footing after two straight days of
advances. Thursday's move pushed the benchmark to its highest close
since Jan. 23, according to FactSet data.
There are "fairly stretched readings on most technical
indicators" for the FTSE 100, wrote Bill McNamara in his daily The
Technical Trader newsletter. "Although this does not amount to a
sell signal per se it does imply, however, that the scope for
further upside in the near-term has become limited and the chances
of a pull-back of some sort have increased."
Aiding in this week's gain for the FTSE 100 was a pullback in
the pound. A weaker pound tends to bolster the equity benchmark as
its large multinational companies make most of their revenue and
earnings overseas.
The pound suffered Thursday, falling below $1.35 intraday, after
the Bank of England issued its monetary policy update and its
Quarterly Inflation Report. The central bank cut its 2018
second-quarter inflation forecast to 2.4% from 2.7%, and its
forecast for 2018 gross domestic product to 1.4% from 1.8%. As
expected, policy makers left the key interest rate at 0.5%
(http://www.marketwatch.com/story/bank-of-england-holds-key-interest-rate-at-05-cuts-inflation-and-gdp-outlooks-2018-05-10)
in a 7-2 vote.
Some analysts said an August rate increase could still take
place, depending on U.K. economic data which recently has fallen
short of expectations.
Stock movers
Off the main benchmark, ZPG PLC shares (ZPG.LN) rallied 30% to
GBP4.89 after the owner of property-listed websites Zoopla and
PrimeLocation, among other brands, reached a takeover deal with
U.S. private equity firm Silver Lake for GBP2.2 billion ($2.99
billion). The offer of 490 pence a share in cash is a 31% premium
over ZPG's closing price Thursday of 375.20 pence.
"Silver Lake is the global leader in technology investing and I
am firmly of the belief that ZPG will benefit from their technology
expertise and global network which will help accelerate our
growth," said ZPG's founder and Chief Executive Alex Chesterman in
a statement.
Among the FTSE 100's leading decliners, water utility Severn
Trent PLC (SVT.LN) fell 2.3% and rival United Utilities Group PLC
(UU.LN) fell 1.7%.
ITV PLC (ITV.LN) rose 4.7%, topping the FTSE 100, extending
Thursday's 6.1% jump after the broadcaster posted a 5% increase in
total external revenue
(http://www.marketwatch.com/story/itv-posts-higher-revenue-upbeat-forecast-2018-05-10)
for the first quarter.
(END) Dow Jones Newswires
May 11, 2018 07:29 ET (11:29 GMT)
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