LONDON MARKETS: FTSE 100 Wavers, But Miners Find Relief After Selloff
26 August 2016 - 1:17PM
Dow Jones News
By Carla Mozee, MarketWatch
Investors wait to hear from Fed chief Yellen
U.K. stocks sought firm direction Friday, as investors waited
for a highly anticipated speech from U.S. Federal Reserve
Chairwoman Janet Yellen.
The FTSE 100 was flat at 6,816.73, but it has been swinging
between small gains and losses during the day. Utilities, health
care and consumer goods were among the declining sectors, but
miners were higher after being under pressure this week. The London
benchmark was on track to fall 0.6% for the week, which would be a
second straight weekly loss.
The index on Thursday lost 0.3%
(http://www.marketwatch.com/story/ftse-100-struggles-as-miners-drug-makers-pull-lower-2016-08-25),
weighed by those losses for miners and for drug makers.
But advancers on Friday included BAE Systems PLC (BA.LN) ,
perched near the top of the FTSE 100. Shares rose 2.1% as the
defense company's rating was upgraded to buy from hold at
Berenberg.
"We anticipate a material order book uplift, an improving cash
profile in 2017 (with potential upside to guidance), and a secure
progressive dividend across our forecast," wrote Berenberg analyst
Charlotte Keyworth in a research note.
Economic docket: The second reading of U.K. gross domestic
product in the second quarter was released, and the Office for
National Statistics confirmed the preliminary print of 0.6%,
meeting market expectations.
The pound held steady around $1.3217 after the ONS update, but
began stepping lower before Yellen's speech at 3 p.m. London time,
or 10 a.m. Eastern Time.
Investors will watch for hints on the future of U.S. interest
rates from Yellen, who will address attendees at the central bank's
summer summit in Jackson Hole, Wyo.
"Chair Yellen faces a daunting task today of delivering a
differential confidence message on U.S. growth and inflation
fundamentals, but without destabilizing financial conditions in a
highly rate-sensitive international market environment," said Lena
Komileva, chief economist at G+ Economics, in a note.
"For risk markets more broadly, the Fed has limited room to
oppose an expansionary global monetary consensus, given the U.S.
dollar's rate sensitivity in an international monetary environment
of negative rates and central bank QE," she said.
Sterling was buying $1.3199, compared with $1.3175 late
Thursday. The yield on the U.K.'s 10-year gilt was up less than 1
basis point at 0.56%, according to TradeWeb.
The Bank of England early this month expanded its QE program and
launched other aggressive easing moves aimed at cushioning the
British economy in the wake off the Brexit vote.
Read:The 4 scenarios investors face ahead of Yellen's Jackson
Hole speech
(http://www.marketwatch.com/story/the-4-scenarios-investors-face-ahead-of-yellens-jackson-hole-speech-2016-08-25)
Movers: Shares of Glencore PLC (GLEN.LN) pushed up 2.9% after
two sessions of heavy declines, after the miner posted a half-year
loss of $369 million
(http://www.marketwatch.com/story/glencore-steps-up-debt-cuts-as-it-swings-to-loss-2016-08-24).
Other mining stocks rose as well, with Rio Tinto PLC (RIO) (RIO)
(RIO) up 2.1% and Antofagasta PLC (ANTO.LN) higher by 0.9%.
But drug makers remained under pressure in the wake of backlash
about drug pricing in the U.S. The furor was spurred by a
substantial price hike for Mylan NV's (MYL) EpiPen, an emergency
allergy treatment.
Read:How Hillary Clinton crushed another rally in biotech
(http://www.marketwatch.com/story/how-hillary-clinton-crushed-another-rally-in-biotech-2016-08-24)
In London, Shire PLC (SHPG) (SHPG) fell 0.7%, AstraZeneca PLC
(AZN.LN) (AZN.LN) was down 1.2%, and GlaxoSmithKline PLC
(GSK.LN)(GSK.LN) lost 0.5%.
Hikma Pharmaceuticals PLC (HIK.LN) , however, picked up
0.6%.
Brewer SABMiller PLC (SAB.JO) was up 0.1% after Belgium's
Anheuser-Busch InBev NV (ABI.BT) warned its merger with SAB could
lead to thousands of job losses
(http://www.marketwatch.com/story/ab-inbev-warns-3-to-be-laid-off-in-merger-2016-08-26)
in coming years, according to documents related to the
transaction.
On the midcap FTSE 250, Amec Foster Wheeler PLC (AMFW.LN) shares
jumped 7.8% following a ratings upgrade at Morgan Stanley of the
energy engineering company to overweight from equalweight.
Meanwhile, Ladbrokes PLC (LAD.LN) climbed 3.1% after the betting
company's rating was lifted to buy from hold at Berenberg.
The FTSE 250 was up 0.2% at 17,918.14.
(END) Dow Jones Newswires
August 26, 2016 07:02 ET (11:02 GMT)
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