By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- The FTSE 100 was set for a gain of 3%
for the week, but Friday's session saw some backtracking as
investors struggled to read better-than-expected U.S. jobs data.
Goldman Sachs, meanwhile, said it now sees the index reaching
7,100.
London stocks failed to follow up from a blockbuster prior-day
session. The FTSE 100 index logged its best one-day advance and
percentage gain since fall 2011 on Thursday, rising 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.
On Friday, the index drifted to flat at 6,418.38 after data
showed better-than-expected June jobs growth for the U.S. and
upward revisions to two prior months. Analysts said the data will
keep the Fed on track for tapering its bond-buying program.
Several miners stepped back from lofty prior-day gains. Shares
of Rio Tinto PLC (RIO) fell 2.8%, BHP Billiton PLC (BHP) declined
2.7% and Glencore Xstrata PLC tumbled 4.7%. Shares of Randgold
Resources Ltd. fell 4.3% even as Nomura lifted shares to neutral
from reduce.
Shares of Whitbread PLC fell nearly 3% after UBS strategists cut
shares 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 HSBC Holdings PLC (HBC) rose 1% and (BCS) rose close
to 1%, providing support for the index.
Goldman Sachs said in a note on Friday that it was advising
going long U.K. equities and targeting 7,100 for the FTSE 100. 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.
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