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May 26, 2016, 12:20 p.m. EDT

FTSE 100 limps to one-month closing high

U.K. business investment drops, a sign of Brexit-related caution

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By Carla Mozee, MarketWatch


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U.K. stocks barely finished in positive territory Thursday, but managed to log its best close in nearly a month as crude futures extended their recent gains.

The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -0.02%  closed less than 0.1% higher at 6,265.65, just enough to register its third advance in a row and its best close since April 27, according to FactSet data.

London stocks had been switching between small gains and losses throughout the day as major oil companies scored a lift from a rally in Brent crude-oil prices, surging above $50 a barrel. But energy names pulled back a touch as crude prices retreated from their highs.

On Wednesday, the blue-chip benchmark /zigman2/quotes/210598409/delayed UK:UKX -0.02% rose 0.7% and finished at its highest since April 28. The London benchmark has gained 1.8% so far this week, which would mark its biggest weekly rise since mid-April.

Energy: Shares of oil heavyweight Royal Dutch Shell PLC   slipped 0.2%, and BP PLC   /zigman2/quotes/207305210/composite BP +1.48%  edged 0.4%, lower.

Early in the session, oil names were on the rise after Brent crude  topped $50 a barrel for the first time since November after U.S. data showed a larger-than-expected decline in weekly stockpiles. West Texas Intermediate oil /zigman2/quotes/209725316/delayed CLN26 0.00%  during Thursday’s session also made it over the $50 hurdle. Both grades of crude came off their highs, which coincided with energy shares losing some ground.

“The FTSE is consolidating gains after having hit a four-week high yesterday. The 200-day moving average, 6,145, is expected to lend a base to pullbacks for a potential expansion toward the 6,300 on recovery in energy prices,” said Ipek Ozkardeskaya, market analyst at London Capital Group, in a note.

Read: Why oil jumping above $50 is actually disastrous for crude

Movers: Elsewhere on Thursday, banking shares pulled back. Standard Chartered PLC /zigman2/quotes/200125072/delayed UK:STAN -0.30%  was off 1%, and Royal Bank of Scotland PLC   shed 2.9%. See more on Spanish bank stocks in European Markets.

On the FTSE 250 /zigman2/quotes/210598417/delayed UK:MCX +0.25% , Tate & Lyle PLC /zigman2/quotes/205109332/delayed UK:TATE +0.13%  picked up 1.6% as the Splenda maker posted a rise in 2016 pretax profit.

Elsewhere, Daily Mail & General Trust PLC tumbled 10.8% after the publisher cut its operating-margin target for its DMG Media unit.

Sterling: Meanwhile, the pound slipped after a second reading of U.K. gross domestic product growth in the first quarter.

The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.8883%  was buying $1.4708, down from $1.4722, after the Office for National Statistics confirmed the British economy expanded 0.4% quarter-on-quarter. But the year-over-year growth rate was cut, to 2% from 2.1%.

The ONS also said U.K. business investment declined 0.5% in the first quarter, driven by a pullback in nonresidential real-estate investment. The figures arrived ahead of the June 23 in/out referendum on whether Britain should stay in the European Union.

“If the U.K. were to remain in the EU, we could easily see the pound rally to $1.50 or $1.51,” he said. But “the reason I’m not saying it will rally higher is because I think the market is pricing in already a ‘remain’ result,” said Markos Solomou, chief marketing officer at EasyMarkets.

But “if it’s a Brexit, I see [the pound at] $1.35, easy. There will be lots of confusion,” and such a move could take place within the day the result is released, he said. The Electoral Commission expects a vote result on the morning of June 24.

As for equities, stocks on the midcap FTSE 250 “will react more negatively to a Brexit” than constituents on the FTSE 100, Solomou said. The FTSE 100 “would act as some kind of hedge to jump into global companies that may not be really affected by the local economy,” he said.

On Thursday, the FTSE 250 /zigman2/quotes/210598417/delayed UK:MCX +0.25%  closed 0.2% lower.

/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,516.59
-1.76 -0.02%
Volume: 91,960
May 18, 2022 10:03a
loading...
/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,516.59
-1.76 -0.02%
Volume: 91,960
May 18, 2022 10:03a
loading...
/zigman2/quotes/207305210/composite
US : U.S.: NYSE
$ 31.48
+0.46 +1.48%
Volume: 10.71M
May 17, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
4.10%
Market Cap
$99.12 billion
Rev. per Employee
$2.62M
loading...
/zigman2/quotes/209725316/delayed
US : U.S.: Nymex
$ 70.01
0.00 0.00%
Volume: 0.00
May 17, 2022 5:05p
loading...
/zigman2/quotes/200125072/delayed
UK : U.K.: London
590.00 p
-1.80 -0.30%
Volume: 1.16M
May 18, 2022 10:03a
P/E Ratio
13.62
Dividend Yield
1.54%
Market Cap
£17.46 billion
Rev. per Employee
£167,448
loading...
/zigman2/quotes/210598417/delayed
UK : FTSE UK
20,114.78
+49.19 +0.25%
Volume: 53,244
May 18, 2022 10:03a
loading...
/zigman2/quotes/205109332/delayed
UK : U.K.: London
785.00 p
+1.00 +0.13%
Volume: 141,839
May 18, 2022 9:58a
P/E Ratio
14.24
Dividend Yield
4.61%
Market Cap
£3.10 billion
Rev. per Employee
£632,065
loading...
/zigman2/quotes/210561263/realtime/sampled
US : Tullett Prebon
1.2385
-0.0111 -0.8883%
Volume: 0.0000
May 18, 2022 5:18a
loading...
/zigman2/quotes/210598417/delayed
UK : FTSE UK
20,114.78
+49.19 +0.25%
Volume: 53,244
May 18, 2022 10:03a
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Carla Mozée is a reporter for MarketWatch, based in London. Follow her on Twitter @MWMozee.

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