LONDON MARKETS: Unilever Helps Lift FTSE 100 To Highest Finish In A Month
July 20 2017 - 12:20PM
Dow Jones News
By Carla Mozee, MarketWatch
Retail sales rise; sterling loses grip on $1.30; easyJet shares
suffer
U.K. stocks bounced to their highest close in a month Thursday,
with Ben & Jerry's ice cream maker Unilever PLC gaining after
its earnings report, one of a stream of financial releases.
Stocks remained higher after the release of U.K. retail sales
data, and weakness in the British pound also aided British
blue-chips.
The FTSE 100 index climbed 0.8% to 7,487.87. That's the best
finish since June 19, and the largest percentage rise since July
12, FactSet data showed. All but the basic materials sector
advanced.
In the oil and gas group, BP PLC shares (BP.LN) popped up 1%
after The Wall Street Journal reported that the oil producer has
approached potential buyers of its oil-and-gas production assets in
the North Sea
(http://www.marketwatch.com/story/bp-approaches-possible-buyers-of-north-sea-assets-2017-07-20).
The FTSE 100 outperformed European stocks (), which fell after
European Central Bank President Mario Draghi said policy makers
will discuss its bond-buying program in the "autumn". At the same
time, investors sent the euro flying to its highest in more than a
year, brushing past the dovish tone about monetary stimulus that
Draghi aimed to strike at his press conference.
Investors have used proceeds from sales in bonds to the ECB to
buy other assets, including U.K. equities.
Read:Nobody told the euro that Mario Draghi was dovish
(http://www.marketwatch.com/story/nobody-told-the-euro-that-mario-draghi-was-dovish-2017-07-20)
Earnings season: More corporate results were issued Thursday.
Unilever shares (ULVR.LN) advanced 1.7% after the maker of Lipton
tea and Alberto Balsam hair care products said first-half net
profit rose to 3.11 billion euros ($3.58 billion) and that margins
should be better than previously expected over the full year.
(http://www.marketwatch.com/story/unilever-posts-profit-gain-lifts-margin-guidance-2017-07-20)
But shares of EasyJet PLC (EZJ.LN) were dragged down 5.9% even
as the budget airline said unit revenue turned positive
(http://www.marketwatch.com/story/easyjet-quarterly-unit-revenue-turns-positive-2017-07-20)
in the third quarter after a period of sharp declines.
Despite an improvement in the third quarter, "the group still
expects revenue per seat to decline by 2% across the second half as
a whole, and that suggests that the key summer period has been
seeing some significant discounting," wrote Laith Khalaf, senior
analyst at Hargreaves Lansdown.
Anglo American PLC (AAL.LN) retreated from earlier gains and
closed down 2.9%. The miner raised this year's production guidance
for its Kumba Iron Ore business in South Africa, and posted an 8%
increase in copper equivalent production
(http://www.marketwatch.com/story/anglo-american-ups-kumba-iron-ore-output-guidance-2017-07-20)
in the second quarter.
Off the main benchmark, shares of Sports Direct International
PLC (SPD.LN) rallied 11%, pushing past the sports-equipment
retailer's report that a slide in the pound drove down fiscal 2017
pretax profit.
(http://www.marketwatch.com/story/sports-direct-profit-hit-by-brexit-battered-pound-2017-07-20)
(http://www.marketwatch.com/story/sports-direct-profit-hit-by-brexit-battered-pound-2017-07-20)Moneysupermarket.com
Group PLC shares (MONY.LN) fell 2.5%, but recovered from deeper
losses, as the price comparison website warned adjusted operating
profit will be at the lower end of market consensus for the full
year.
(http://www.marketwatch.com/story/moneysupermarketcom-warns-on-yearly-profit-2017-07-20)
Sterling: The pound had pared its loss against the dollar after
the Office for National Statistics said U.K. retail sales rose 2.9%
in June year-over-year,
(http://www.marketwatch.com/story/uk-retail-sales-rebounded-in-second-quarter-2017-07-20-44855431)
above a FactSet estimate of 2.6%. Sales rose by 1.5% for the second
quarter.
But the pound eventually turned lower, falling to $1.2964,
compared with an intraday high of $1.3033 and with late Wednesday's
settlement of $1.3025.
"Sterling fell as it appeared there has been no real progress on
Brexit talks, despite stronger retail sales figures delivering a
short-term boost to sentiment," ETX Capital's senior market analyst
Neil Wilson wrote.
Read:EU, U.K. clash over divorce bill
(https://www.wsj.com/articles/eus-barnier-seeks-clarity-from-u-k-over-brexit-divorce-bill-1500550926)
"Where now? There is so much negativity around at the moment
that any rallies in sterling are likely to come under pressure,
which makes heading north of $1.30 hard going," said Wilson. "There
is no compelling reason to buy the pound right now, especially
since that weak inflation read killed of an imminent rate increase
by the Bank of England, so any rally looks a sell."
A weaker pound can help push up shares of export-focused
multinational companies that pull in revenue from overseas, and
that, in turn, can bolster the FTSE 100 index.
Check out:Why there is a 'massive' opportunity in British
leisure stocks
(http://www.marketwatch.com/story/why-there-is-a-massive-opportunity-in-british-leisure-stocks-2017-07-19)
(END) Dow Jones Newswires
July 20, 2017 13:05 ET (17:05 GMT)
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