LONDON MARKETS: FTSE 100 Seesaws, But Energy Stocks Gain As Oil Tops $50
26 Mai 2016 - 03:54PM
Dow Jones News
By Carla Mozee, MarketWatch
U.K. business investment drops, a sign of Brexit-related
caution
U.K. stocks wavered Thursday, hovering near a one-month high,
but energy shares moved higher as Brent oil traded above $50 a
barrel.
The FTSE 100 was off 0.1% at 6,259.317, and has been swaying
between small gains and losses throughout the day. On Wednesday,
the blue-chip benchmark rose 0.7%
(http://www.marketwatch.com/story/ftse-100-rises-as-oil-aims-for-50-a-barrel-2016-05-25)
and finished at its highest since April 28, FactSet data show. A
win on Thursday would be the index's third in a row.
"The FTSE is consolidating gains after having hit a four-week
high yesterday. The 200-day moving average, 6,145, is expected to
lend a base to pullbacks for a potential expansion toward the 6,300
on recovery in energy prices," said Ipek Ozkardeskaya, market
analyst at London Capital Group, in a note.
The London benchmark has gained 1.7% so far this week, which
would be its biggest weekly rise since mid-April.
Energy boost: Shares of oil heavyweight Royal Dutch Shell PLC
(RDSB.LN) (RDSB.LN) gained 0.9%, and BP PLC (BP.LN) (BP.LN) added
0.8%, rising alongside oil prices.
Brent crude topped $50 a barrel for the first time since
November
(http://www.marketwatch.com/story/brent-crude-tops-50-a-barrel-for-first-time-since-november-2016-05-25)
after U.S. data showed a larger-than-expected decline in weekly
stockpiles. West Texas Intermediate oil during Thursday's session
also made it over the $50 hurdle.
Read:Why oil jumping above $50 is actually disastrous for crude
(http://www.marketwatch.com/story/why-oil-jumping-above-50-is-actually-disastrous-for-crude-2016-05-26)
Movers: Elsewhere on Thursday, banking shares pulled back.
Standard Chartered PLC (STAN.LN) was off 1.2%, and Royal Bank of
Scotland PLC (RBS.LN) (RBS.LN) shed 2%. See more on Spanish bank
stocks in European Markets
(http://www.marketwatch.com/story/european-shares-waver-as-spanish-banks-slide-oil-stocks-rise-2016-05-26).
On the FTSE 250 , Tate & Lyle PLC (TATE.LN) picked up 1% as
the Splenda maker posted a rise in 2016 pretax profit
(http://www.marketwatch.com/story/tate-lyle-pretax-profit-rises-for-2016-2016-05-26).
Elsewhere, Daily Mail & General Trust PLC (DMGT.LN) fell
12.8% after the publisher cut its operating-margin target for its
DMG Media unit
(http://www.marketwatch.com/story/daily-mail-profit-up-54-cuts-dmg-media-target-2016-05-26).
Sterling: Meanwhile, the pound slipped after a second reading of
U.K. gross domestic product growth in the first quarter.
The pound was buying $1.4708, down from $1.4722, after the
Office for National Statistics confirmed the British economy
expanded 0.4% quarter-on-quarter. But the year-over-year growth
rate was revised downward, to 2% from 2.1%.
The ONS also said U.K. business investment declined 0.5%
(http://www.marketwatch.com/story/uk-business-investment-down-as-brexit-vote-nears-2016-05-26)
in the first quarter, driven by a pullback in non-residential
real-estate investment. The figures arrived ahead of the June 23
in/out referendum on whether Britain should stay in the European
Union.
"If the U.K. were to remain in the EU, we could easily see the
pound rally to $1.50 or $1.51," he said. But "the reason I'm not
saying it will rally higher is because I think the market is
pricing in already a 'remain' result," said Markos Solomou, chief
marketing officer at EasyMarkets.
But "if it's a Brexit, I see [the pound at] $1.35, easy. There
will be lots of confusion," and such a move could take place within
the day the result is released, he said. The Electoral Commission
expects a vote result on the morning of June 24.
As for equities, stocks on the mid-cap FTSE 250 "will react more
negatively to a Brexit" than constituents on the FTSE 100, Solomou
said. The FTSE 100 "would act as some kind of hedge to jump into
global companies that may not be really affected by the local
economy," he said.
(END) Dow Jones Newswires
May 26, 2016 09:39 ET (13:39 GMT)
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