LONDON MARKETS: FTSE 100 Limps To One-month Closing High
26 Mai 2016 - 6:35PM
Dow Jones News
By Carla Mozee, MarketWatch
U.K. business investment drops, a sign of Brexit-related
caution
U.K. stocks barely finished in positive territory Thursday, but
managed to log its best close in nearly a month as crude futures
extended their recent gains.
The FTSE 100 closed less than 0.1% higher at 6,265.65, just
enough to register its third advance in a row and its best close
since April 27, according to FactSet data.
London stocks had been switching between small gains and losses
throughout the day as major oil companies scored a lift from a
rally in Brent crude-oil prices, surging above $50 a barrel. But
energy names pulled back a touch as crude prices retreated from
their highs.
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. The London benchmark
has gained 1.8% so far this week, which would mark its biggest
weekly rise since mid-April.
Energy: Shares of oil heavyweight Royal Dutch Shell PLC
(RDSB.LN) (RDSB.LN) slipped 0.2%, and BP PLC (BP.LN) (BP.LN) edged
0.4%, lower.
Early in the session, oil names were on the rise after 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. Both grades of crude came off
their highs, which coincided with energy shares losing some
ground.
"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.
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%, and Royal Bank of
Scotland PLC (RBS.LN) (RBS.LN) shed 2.9%. 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 1.6%
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) tumbled
10.8% 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 cut, 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 nonresidential
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 midcap 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.
On Thursday, the FTSE 250 closed 0.2% lower.
(END) Dow Jones Newswires
May 26, 2016 12:20 ET (16:20 GMT)
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