Sun, May 03, 2015 - Page 15 News List

FTSE gains for the day; STOXX down for month

Reuters and Bloomberg

Major European markets were closed on Friday, except for Britain’s top equity index, which gained ground, as a surge in the shares of Lloyds bank and miners boosted the market, although caution before next week’s national election kept a lid on the progress.

Lloyds soared 7.1 percent after reporting profits at the top end of analysts’ forecasts.

Miners such as Anglo American and Rio Tinto also rallied after data showing that China’s factories struggled to grow last month reinforced expectations that China — the world’s biggest metals consumer — would roll out more measures to support its slowing economy.

Lloyds was the best-performer on the blue-chip FTSE 100 index, which closed up 0.4 percent at 6,985.95 points.

The FTSE hit a record high of 7,122.74 points on Monday, but has since edged back, as caution has set in among investors before the British election on Thursday. The index remains up by about 6 percent since the start of the eyar.

“The [election] result looks too close to call so a lot of people will be looking to bank some profits ahead of the vote,” said Dafydd Davies, partner at Charles Hanover Investments.

Opinion polls put the right-wing Conservatives, who lead the current coalition government, neck-and-neck with the opposition left-wing Labour Party, while the Scottish National Party could emerge as the third-biggest party.

A further risk also stems from the Conservatives’ promise of a referendum on Britain’s membership of the EU by the end of 2017, if they win.

Davies said certain sectors could underperform more than others next week, such as utilities and housebuilders.

On Thursday, European stocks fell for a third day to their first monthly drop of the year, as the US Federal Reserve left open the prospect of interest-rate increases even amid weak US growth.

The STOXX Europe 600 Index slid 0.3 percent to 396.11 at 4:30pm in London, after earlier losing as much as 1 percent. Shares briefly rose 0.2 percent after data showed US jobless claims fell to a 15-year low.

European stocks have fallen 4.3 percent from an April 15 record, posting a monthly drop of 0.3 percent, as some companies posted disappointing earnings and talks over Greece’s debt reached an impasse.

“It looks like we could be finally entering the correction that everyone has been waiting for,” said Tobias Britsch at Meriten Investment Management GmbH, in Dusseldorf, Germany.

“A mix of weaker growth in the US, the Fed set to hike rates, never-ending worries about Greece, and some disappointing earnings figures have triggered this selloff. Let’s see how long and deep it will be, but it’s what the market needed. A lot of investors will use the lower levels to move in again,” he said.

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