By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- U.K. stocks slid Friday but ended with
the best weekly gain in six months, propelled by indications from
the new central bank governor that signaled a pro-stimulus
stance.
On Friday, the FTSE 100 index declined 46.15 points, or 0.7%, to
6,375.52. It ended the week up 2.6%, the highest weekly rise since
the week of Jan. 4.
U.K. equities failed to follow through from a blockbuster
Thursday. The FTSE 100 logged its best one-day advance and
percentage gain since fall 2011 on Thursday, surging 3%, or 191.80
points, to 6,421.67 after strong hints from the Bank of England
that it will keep its monetary policy accommodative.
Several miners stepped back after posting strong gains on
Thursday. Shares of Rio Tinto PLC (RIO) fell 4.4% in London, BHP
Billiton PLC (BHP) declined 3.6% and Glencore Xstrata PLC tumbled
6.5%. Shares of Randgold Resources Ltd. fell 5.8% even as Nomura
lifted shares to neutral from reduce, as gold prices sank.
Shares of Whitbread PLC fell 2.8% after UBS strategists cut the
firm to neutral from buy, after an investment day. "While we view
the new brand and international expansion plans positively, we do
not think these initiatives change the near-term outlook," said
Jarrod Castle, analyst at UBS.
Shares of index heavyweight HSBC Holdings PLC (HBC) rose 0.2%,
providing some support for the FTSE.
Goldman Sachs said in a note on Friday that it was advising
going long U.K. equities and targeting 7,100 for the blue-chip
index. The investment bank gave three reasons for its view: First,
the U.K. economy looks to be on an upswing and second, monetary
policy looks set to ease further, especially after Thursday's
dovish statement from the Bank of England, led by new Governor Mark
Carney.
"Third, our forecasts also envisage a gradual stabilization in
euro area growth in the second half of the year. As one of the
U.K.'s largest trading partners, the gradual improvement in growth
here should also be a tailwind for the U.K. economy and U.K.
markets," wrote economist Noah Weisberger in a note.
U.K. stocks didn't get a lift from a better-than-expected June
jobs growth for the U.S. and upward revisions to data for the two
previous months. Analysts said the data will keep the Fed on track
for tapering its bond-buying program.
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