By Carla Mozee, MarketWatch
Oil companies lag
LONDON (MarketWatch)--U.K. stocks dropped to a nearly four-month
low Friday, underpinning losses for a week during which investors
wrestled with geopolitical tensions and signs of EU economic
weakness.
The FTSE 100 index declined 0.5% to 6,567.36, its lowest close
since April 15, according to FactSet data. The FTSE lost 1.7% for
the week, a second straight losing week.
Shares in oil companies fell, not getting any traction from the
gain in oil prices (CLU4). Those gains came after U.S. President
Barack Obama on Thursday authorized targeted airstrikes in northern
Iraq, and after data showed China's oil imports rose in July.
The Pentagon said Friday airstrikes targeting Islamist militants
in Iraq had begun.
Shares of oil major BP (BP) fell 1.1%, BG Group shed 2.3% and
Royal Dutch Shell moved 1% lower.
U.K. and other European stocks dropped this week as investors
sought safety in bonds and other so-called safe-haven assets. The
moves came as a trade war between Russia and the West escalated,
with the action expected to hurt the euro zone more than any other
region.
Closer to home, the U.K.'s Office for National Statistics on
Friday said the country's trade deficit widened in June to 9.4
billion pounds ($15.8 billion) as exports declined more rapidly
than imports. The trade deficit grew with other members of the EU,
but narrowed with countries outside of the currency union. The ONS
also said construction output rose by 1.2% in June from May.
The construction-side gain "may prevent expectations of Q2 GDP
revisions, but the deterioration of the trade balance underscores
an economic headwind," said analysts at Brown Brothers Harriman in
a note Friday.
The pound (GBPUSD) fell to $1.6776, extending losses from
$1.6833 late Thursday.
Advancers on the FTSE 100 included investment services firm
Hargreaves Lansdown and miner Fresnillo PLC , whose shares each
ended 3.2% higher.
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