LONDON MARKETS: FTSE 100 Ends Higher, Led By ITV's Bounce
July 26 2017 - 11:16AM
Dow Jones News
By Carla Mozee and Victor Reklaitis, MarketWatch
British GDP meets expectations with 0.3% rise in second
quarter
U.K. stocks closed higher Wednesday, helped in part by rises for
miners and broadcaster ITV PLC, while expectations for modest
growth in the British economy were met.
The FTSE 100 index rose 0.2% to finish at 7,452.32, building on
Tuesday's advance of 0.8%
(http://www.marketwatch.com/story/ftse-100-advances-with-oil-stocks-up-jimmy-choo-rallies-2017-07-25).
ITV (ITV.LN) notched a 2.4% rise for the benchmark's biggest
gain. The home of "Downton Abbey" backed its 2017 guidance and
raised its dividend
(http://www.marketwatch.com/story/itv-profit-falls-16-but-dividend-is-raised-2017-07-26),
saying its 16% fall in first-half pretax profit was in line with
its expectations.
Also higher, Fresnillo PLC (FRES.LN) was up 0.6%. The miner
reaffirmed its 2017 production guidance
(http://www.marketwatch.com/story/fresnillo-gold-silver-production-rises-2017-07-26)
as it reported higher silver and gold output for the second
quarter.
Anglo American PLC (AAL.LN) tacked on 2%, adding to Tuesday's
6.1% rise
(http://www.marketwatch.com/story/ftse-100-advances-with-oil-stocks-up-jimmy-choo-rallies-2017-07-25)
that came after the miner's Kumba Iron Ore unit said it would
restart dividend payments.
Other stock movers: Compass Group PLC shares (CPG.LN) climbed
1.8% after the catering services company said reported a rise in
third-quarter revenue and backed its full-year expectations.
But Sage Group PLC (SGE.LN) lost 1.2% after the company said
organic software and software-related services revenue dropped by
5.9% for the first nine months of the fiscal year. The financial
software maker also said it's buying Intacct Corp., a cloud-based
financial management software maker based in San Jose, Calif., for
GBP654 million ($850 million).
Shares of engineering group GKN PLC (GKN.LN) closed 1% higher,
erasing earlier losses, after the company said first-half pretax
profit more than tripled to 559 million pounds
(http://www.marketwatch.com/story/gkn-earnings-rise-offers-upbeat-2017-outlook-2017-07-26)
($719.9 million). The aerospace and automotive parts supplier said
it has closed its defined-benefit pension scheme.
Economic data: A first reading of U.K. gross domestic product in
the second quarter was released by the Office for National
Statistics. The British economy grew by 0.3% in the second quarter
over the previous quarter and was up 1.7% year-over-year, meeting
expectations from a FactSet survey of economists. In the first
quarter, GDP expanded by a modest 0.2%.
British economic growth in the second quarter was driven by the
services sector, while production and construction acted as a drag,
the ONS said in its statement
(https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/articles/monthlyeconomiccommentary/july2017).
"The economy has experienced a notable slowdown in the first
half of this year," ONS Head of National Accounts Darren Morgan
said.
The pound fell to an intraday low of $1.3000 before rising to
$1.3045, above late Tuesday's settlement of $1.3026 in New
York.
While growth remains largely anemic, tentative signs pointing to
improvement in the second half of the year include
better-than-expected retail sales in June, said Ben Brettell,
senior economist at Hargreaves Lansdown, in a note.
"Yesterday, a CBI survey showed U.K. factories increasing output
at the fastest rate since the mid-1990s, suggesting
manufacturing--which makes up around ten percent of the
economy--might make a meaningful contribution to overall economic
growth in the third and fourth quarters," he said.
"As ever it's worth noting that initial GDP estimates can
usually be taken with a pinch of salt, as they are based on less
than half of the data which will ultimately be available, and are
therefore subject to revision in the coming months," he said.
Later Wednesday, the U.S. Federal Reserve will announce its
latest monetary policy decision. U.K. investors closely watch U.S.
central bank moves, as they can drive price changes in the pound
and in government bonds, as well as shift sentiment.
See:Fed to stick to plans for rate hike, balance-sheet selloff
this year
(http://www.marketwatch.com/story/no-retreat-fed-to-stick-to-plans-for-rate-hike-balance-sheet-selloff-this-year-2017-07-24)
The Federal Open Market Committee decision is due at 7 p.m.
London time, or 2 p.m. Eastern.
(END) Dow Jones Newswires
July 26, 2017 12:01 ET (16:01 GMT)
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