LONDON MARKETS: FTSE 100 Edges Up As Miners, Oil Companies Find A Higher Toehold
May 24 2016 - 4:43AM
Dow Jones News
By Carla Mozee, MarketWatch
DIY retailer Kingfisher tops index after earnings
U.K. stocks turned higher Tuesday, as commodity shares managed
to nudge upwards even as oil prices dropped and worries about
Federal Reserve interest-rate rises persisted.
The FTSE 100 was up 0.3% at 6,156.98 after opening in the red.
The London benchmark shed 0.3% on Monday
(http://www.marketwatch.com/story/ftse-100-edges-higher-even-as-miners-struggle-2016-05-23),
as energy shares were dragged down alongside falling oil
prices.
Crude prices were again falling early Tuesday, but shares of
energy majors were able to advance. BP PLC (BP.LN) (BP.LN) was up
0.4%, and Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) was higher by
0.2%.
Mining shares lost ground earlier Tuesday, as investors worried
about the prospect of a U.S. interest-rate increase in coming
months, which could result in higher borrowing costs for emerging
markets. But some shares flipped higher, with Anglo American PLC
(AAL.LN) up 0.6% and Antofagasta PLC (ANTO.LN) gaining 0.5%. Rio
Tinto PLC (RIO) (RIO) (RIO) , which announced it has appointed a
new head of technology and innovation, turned up 0.5%.
The market is now pricing in a 46% chance of a July rate hike
from the U.S. Federal Reserve, according to the CME Group's
FedWatch tool
(http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html).
The chance of a June hike is at 30%.
"It's the fear of a rate hike from the Federal Reserve next
month that really does seem to be calling the shots right now, so
although the economic data that's due from the U.S. later today is
relatively low key, we should expect this to be under a degree of
scrutiny," said Tony Cross, market analyst at Trustnet Direct, in a
note.
At the top of the FTSE 100 was Kingfisher PLC (KGF.LN) , as its
shares gained 2%. The home improvement retailer posted 5% growth in
group sales
(http://www.marketwatch.com/story/kingfisher-sales-up-5-trading-in-line-with-views-2016-05-24)
for the first three months of its new financial year and said that
trading remains in line with expectations.
"It's too early to see the competitive impact of the sale of
Homebase to Wesfarmers earlier this year, but this is set to be an
increasing challenge. Kingfisher are nicely placed to benefit from
a recovery in France and wider Europe, if and when it happens,"
said George Salmon, equity analyst at Hargreaves Lansdown, in a
note.
In other moves, Severn Trent PLC (SVT.LN) shares rose 0.9% after
the water and waste water company said its 2016 pretax profit more
than doubled
(http://www.marketwatch.com/story/severn-trent-pretax-profit-more-than-doubles-2016-05-24)
to 322.3 million pounds ($467.1 million).
The pound was up 0.4% at $1.4541 ahead of testimony by Bank of
England Governor Mark Carney to a parliamentary committee. The
committee session on the BOE's inflation report begins at 10 a.m.
London time, or 5 a.m. Eastern Time.
(END) Dow Jones Newswires
May 24, 2016 04:28 ET (08:28 GMT)
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