LONDON MARKETS: FTSE 100 Outperforms Europe To End At 1-week High
May 24 2017 - 12:31PM
Dow Jones News
By Carla Mozee and Sara Sjolin, MarketWatch
Pound back below $1.30
U.K. stocks ended higher on Wednesday, outperforming the broader
European markets as investors shook off disappointing corporate
news and a credit downgrade for China.
Erasing opening losses, the U.K. FTSE 100 ended 0.4% higher at
7,514.90, logging its highest close since May 16.
"A lackluster British pound which has struggled to build on its
election gains in the last week softened the blow of a series of
poorly-received corporate updates from the likes of Marks &
Spencer and B&Q-owner Kingfisher," said Jasper Lawler, senior
market analyst at London Capital Group, in a note.
The pound traded at $1.2932, down from $1.2961 late Tuesday in
New York, ahead of the release of minutes from the Federal
Reserve's most recent meeting after the European close on
Wednesday.
Read:Fed minutes may quell doubt about a June interest-rate hike
(http://www.marketwatch.com/story/fed-minutes-may-quell-fresh-doubts-about-a-june-rate-hike-2017-05-19)
"Early alarm at China's debt downgrade by Moody's eased by the
afternoon with China-sensitive mining stocks well off lows of the
day," he added.
Ahead of the Europe open, Moody's had downgraded China's credit
rating for the first time in nearly 30 years
(http://www.marketwatch.com/story/moodys-downgrades-china-rating-for-the-first-time-in-nearly-30-years-2017-05-24),
to A1 from Aa3. Moody's said it's concerned about the impact that
rising levels of debt will have on the world's second-largest
economy, which is a major buyer of industrial and precious
metals.
Miners initially traded lower, but ended mixed. Rio Tinto PLC
(RIO) (RIO) (RIO) lost 0.5%, while BHP Billiton PLC (BLT.LN)
(BHP.AU) (BHP.AU) rose 0.9%. Copper miner Antofagasta PLC (ANTO.LN)
climbed 0.4% and Anglo American PLC (AAL.LN) added 0.8%
A "ratings downgrade has been long overdue," for China, wrote
RBC Capital Markets, noting that the yuan dropped sharply against
the dollar after news of the downgrade. "However, the fact that the
rating wasn't cut by more given the deterioration in China's debt
metrics in the past decade saw [China's offshore currency] quickly
recoup losses."
Meanwhile, Glencore PLC (GLEN.LN) pared it loss to 0.1%. The
miner said it "made an informal approach to Bunge
(http://www.marketwatch.com/story/glencore-makes-takeover-approach-to-bunge-2017-05-24)...regarding
a possible consensual business combination." A deal with grain
trader Bunge Ltd. (BG) could make Glencore a major force in the
U.S. agricultural market.
Retailers: Shares of department-store operator Marks &
Spencer PLC (MKS.LN) (MKS.LN) flipped higher, rising 1.5%. They had
been lower at the start of the session after the company said
full-year profit fell to 117.1 million pounds ($152.2 million) from
GBP406.9 million a year ago on weaker sales for clothing and
nonfood items.
The company's "[d]ividend was flat but net debt was better at
GBP1.9 billion," said UBS in a note.
Shares of apparel and furnishings seller Next PLC (NXT.LN) ended
down 0.8%.
Kingfisher PLC shares (KGF.LN) slumped 7% after the parent of
home improvement stores B&Q and Castorama said first-quarter
comparable sales fell 0.6%
(http://www.marketwatch.com/story/kingfisher-quarterly-same-store-sales-decline-2017-05-24)
on weak sales in France and disruption caused by a company
overhaul.
(END) Dow Jones Newswires
May 24, 2017 12:16 ET (16:16 GMT)
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