LONDON MARKETS: FTSE 100 Swings Up As Easyjet Rises, Pound Falls After Miss In Retail Sales
19 Janeiro 2018 - 4:16PM
Dow Jones News
By Carla Mozee, MarketWatch
Retail stocks struggle
U.K. blue-chip stocks turned higher into Friday's finish, with
the swing directed by a drop in the pound after British retail
sales fell sharply, while a ratings upgrade left budget carrier
EasyJet PLC with its best session in two months.
But retail stocks were stuck in the red after the poor December
sales data, and energy shares declined alongside falling oil
prices.
How markets are moving: The FTSE 100 index rose 0.4% to end at
7,730.79, digging out an earlier deficit, albeit a small one.
Advancers were led by the consumer goods and health care groups,
but the oil and gas, telecom and utility groups lost ground.
Friday's win was the first in five sessions.
But for this week, the index ended lower by 0.6%, the first such
loss in seven weeks.
The pound traded at $1.3858 after losing grip of the $1.39
handle. Sterling late Thursday fetched $1.3895.
Read:Why one contrarian investor says the British pound could
rally to $1.40 in 2018
(http://www.marketwatch.com/story/why-one-contrarian-investor-says-the-british-pound-could-rally-to-140-in-2018-2018-01-17)
What's driving markets: The FTSE 100, which is heavily weighed
by multinational companies, found some relief Friday when the pound
pulled back from its strongest levels in more than three years. A
weaker pound can help companies when they convert profit made
overseas back into sterling. Among such multinationals, British
American Tobacco PLC (BATS.LN) jumped 2.3% and Lysol maker Reckitt
Benckiser Group PLC (RB.LN) rose 1.8%.
Sterling fell after U.K. government data showed retail sales in
December sank 1.5%
(http://www.marketwatch.com/story/uk-retail-sales-drop-sharply-in-december-2018-01-19),
a bigger-than-anticipated drop for the period that included the
crucial Christmas shopping season. Britons pulled back on spending
after after snapping up Black Friday discounts in November.
Retail stocks struggled after the data as well as beforehand, as
a profit warning sent shares of flooring seller Carpetright PLC
(CPR.LN) sliding 39%, while Bonmarche Holdings PLC (BON.LN) posted
a sharp drop decline in like-for-like sales
(http://www.marketwatch.com/story/bonmarche-sales-drop-55-backs-yearly-view-2018-01-19)
in the quarter that ended in December. Shares of the apparel
retail, which are not in the FTSE 100, slumped 17%.
U.K. and European stocks during Friday's session outperformed
stocks in the U.S., where a government shutdown could take place on
Saturday.
Read:What happens with stocks when the government shuts down
(http://www.marketwatch.com/story/heres-how-the-stock-market-has-handled-past-government-shutdowns-2018-01-16)
What strategists are saying: "It's another bad day for the U.K.
high street with more profit warnings," said Mike Van Dulken, head
of research at Accendo Markets, in a note said such updates "add to
a stream of negative New Year messages from management about poor
footfall, cost conscious consumers and growing preference for
online versus in-store."
Stock movers: EasyJet PLC (EZJ.LN) rallied 4.7%, the best
session since Nov. 21, after a ratings upgrade to overweight from
equal-weight at Morgan Stanley, which in a note about the European
airline industry said it prefers low-cost carriers into 2018.
EasyJet joins Ryanair Holdings PLC (RYAAY) as Morgan Stanley's
preferred stocks for this year.
"Shorthaul industry consolidation, movement of tour operator
capacity and strong EUR/GBP are key factors behind our view," wrote
analyst Penelope Butcher.
DIY retailer Kingfisher PLC shares (KGF.LN) were pulled down
2.3% after Carpetright's profit warning.
Elsewhere in the retail group, Marks & Spencer Group
(MKS.LN) (MKS.LN) fell 0.7% and clothing and accessories seller
Next PLC (NXT.LN) dropped 1.7%. Bucking the weaker trend, luxury
goods maker Burberry Group PLC (BRBY.LN) (BRBY.LN) rose 0.5%. But
those shares slid more than 10% this week, hit after Burberry said
quarterly sales fell 2%
(http://www.marketwatch.com/story/burberry-retail-sales-slip-backs-2018-guidance-2018-01-17).
Among supermarkets, Tesco PLC (TSCO.LN) fell 0.9%. But J
Sainsbury PLC (SBRY.LN) and Wm Morrison Supermarkets (MRW.LN)
turned higher, with shares in each ending up by 0.1%.
AstraZeneca PLC (AZN.LN) picked up 1.3% as the drugmaker said
two new drugs -- Lynparza tablets for advanced ovarian cancer and
its Fasenra treatment for bronchial asthma-- won regulatory
approval in Japan
(http://www.marketwatch.com/story/astrazeneca-says-2-new-drugs-get-approval-in-japan-2018-01-19).
Shares of oil producers BP PLC (BP.LN) (BP.LN) and Royal Dutch
Shell PLC (RDSB.LN) (RDSB.LN) fell 1.3% and 0.4%, respectively, as
oil prices slid, sending Brent futures below $69 a barrel
(http://www.marketwatch.com/story/oil-prices-sink-1-head-for-biggest-weekly-loss-since-oct-2018-01-19).
(END) Dow Jones Newswires
January 19, 2018 13:01 ET (18:01 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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