U.K. stocks Rise as Pound Falls
On Friday, U.K. stocks closed at their highest level in 6 weeks. Royal Bank of Scotland Group PLC hiked after a positive earnings report. However, stronger-than-expected U.S jobs report for July saw the Pound drop against the dollar.
According to FactSet’s data, FTSE 100 index hiked 0.5% to close the week at 7.511.71;the best close since 19th June.RBC shares notched a 2 percent gain .The hike came after the bank posted its half year earnings reports.
Despite the fact that the lender was weighed down by the $5.5 settlement fine imposed by U.S., it went ahead to post a first half-year profits. The lender posted a profit of $1.23 billion.
A senior analyst at ETX capital, Neil Wilson, commented that even though the fine took a toll, “the omens are looking a lot more promising for a return to private ownership”.
He continued to note that “Based on these figures, the return to genuine sustained profitability in 2018 appears a lot more realistic”.
Majority of the RBS shares are still owned by the state after it was bailed out by the U.K. government in 2008.
The pound traded dismally to the rejuvenated U.S.D where it was pushed to a low of 1.3033.
The dollar traded well with almost all major currencies after the good-than expected data showed that the American economy added 209,000 jobs in July. The wage growth was as expected with 0.3 percent rate.
FTSE 100 benefited from a weaker pound since about 75% all sales for companies are made overseas. Roughly, the pound lost 0.8% against the greenback this week.
Meanwhile, HSBC PLC rose 1%,Barclays PLC rose 0.9%,Standard Chartered hiked 1.5% and Lloyds Banking Group PLC moved up 0.5%.However,a number of stocks plummeted with Barrat Developments PLC leading the way where it dropped 4.7%.Persimonn PLC lost 4% while Taylor Wimpey PLC lost 3.7%.
Merlin Entertainment PLC shares added climbed 5.8 percent after positive half-year revenue. Pearson PLC on the other hand, fell 2% after having risen earlier after narrowed pretax loss.
Hargreaves Lansdown PlC also dropped 2.6%.This came after the revelation that there will be no special dividends this year.
With the Fed most likely to raise the rates this year, Bank of England warned of slower economic growth on Thursday which is mainly as a result of the pending Brexit. Sterling traded at $1.3138 on Thursday.