By Carla Mozee, MarketWatch
Pound falls after disappointing U.K. manufacturing data
U.K. stocks rose Friday, as mining shares strengthened and
Lloyds Banking Group PLC surged after quarterly results. But the
pound slid following disappointing U.K. manufacturing data.
The FTSE 100 closed up 0.4% at 6,985.95, led by a more than 2%
climb in the key mining sector.
The benchmark fell 1.2% on a weekly basis.
U.K. voters will hit the polls on Thursday, and opinion polls
still indicate a tight race and the possibility of a hung
parliament. Before the voting, the FTSE's near-term direction
"remains unclear although encouragingly for the bulls, the index
has found some support for a second day just ahead of the 6,900
level," wrote Fawad Razaqzada, technical analyst, at Forex.com, in
a note Friday.
The FTSE 100 on Thursday finished the month of April with a 2.8%
gain, aided in part by energy shares as oil prices climbed to 2015
highs.
Read: Here's why oil has been rallying to highest level this
year
(http://www.marketwatch.com/story/heres-why-oil-is-rallying-to-its-highest-level-this-year-2015-04-29).
Financials: Lloyds shares topped the benchmark, with a 7.1%
jump, the best since August 2013, according to FactSet data. The
company posted a 21% rise in underlying profit
(http://www.marketwatch.com/story/lloyds-profit-falls-on-tsb-sale-cost-of-1-billion-2015-05-01)
to GBP2.2 billion. However, net profit fell, with Lloyds incurring
a GBP660 million loss related to the sale of its TSB Banking Group
PLC unit .
"Lloyds delivered a solid set of [first-quarter] numbers," said
analysts at Goldman Sachs.
While Lloyds shares climbed Friday, "broader macro/political
uncertainty with the coming U.K. election will likely continue to
mean the stock remains constrained until then," said Credit Suisse
analysts.
Banking heavyweight HSBC PLC (HSBC) will release its
first-quarter financial results on Tuesday. Shares were shed 0.3%
on Friday.
Meanwhile, Barclays PLC (BCS) shares slipped 0.4% after a
ratings cut at Berenberg, to sell from hold. Barclays is "one of
our wild cards" for this year, as it holds the potential to emerge
as a long-term winner in the sector," wrote Berenberg analyst James
Chappell. "Unfortunately, that change seems further away than we
had hoped, as the malaise from the lackluster investment-bank
strategy has worsened."
Elsewhere among financials, Prudential PLC shares fell 1%. The
insurer named Mike Wells as group chief executive, effective June
1. Wells currently serves as the head of Prudential's U.S.
operations. He'll will succeed Tidjane Thiam, who's taking the top
job at Credit Suisse AG .
Miners: Mining stocks were pushed higher, after data showed
manufacturing activity in China, a major buyer of commodities,
remained in expansionary territory in April
(http://www.marketwatch.com/story/china-manufacturing-activity-holds-steady-2015-04-30-214854532).
Separately, Brazilian iron-ore producer Vale (RIO) on Thursday
signaled it's considering cutting output
(http://www.wsj.com/articles/brazils-vale-considers-cutting-iron-ore-output-1430412392)
for the raw material that's used to produce steel.
Shares of the largest iron-ore producers, Rio Tinto PLC and BHP
Billiton PLC, leapt in London. Rio Tinto (RIO) climbed 3.9%, and
BHP (BHP) stepped higher by 3%. Anglo American PLC gained 5.4%.
Pound: Sterling (GBPUSD) was shoved back to $1.5144 after data
showed British manufacturing activity in April fell to a
seven-month low
(http://www.marketwatch.com/story/uk-manufacturing-pmi-falls-to-seven-month-low-2015-05-01).
Markit's purchasing managers index fell to 51.9, from 54 in March.
The pound late Thursday traded at $1.5353.
As of late, there have been "very weak economic data for the
U.K. from GDP to PMI and all this creates more trouble for [Prime
Minister David] Cameron," ahead of next week's election, wrote
Naeem Aslam, chief market analyst at AvaTrade, in a note.
Currency traders "are going to take some profit off the table by
closing most of the positions going into the long weekend and with
the looming uncertainty of the U.K election," he added.
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