LONDON MARKETS: FTSE 100 At One-week High, With HSBC, Shell Boosted By Earnings

By Carla Mozee, MarketWatch Features Dow Jones Newswires

Next shares hit after warning; service-sector output rises

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U.K. blue-chip stocks rose Thursday, with Royal Dutch Shell PLC and HSBC Holdings PLC advancing after earnings reports, as data showed U.K. services-sector activity is on the rise.

The FTSE 100 index moved up 0.3% to 7,254.63, as the pound headed toward$1.29 during the session. Oil and gas shares and the financial sector rose, but the tech, utility and basic materials sector pulled lower. The London benchmark on Wednesday lost 0.2% (http://www.marketwatch.com/story/miners-sainsburys-yank-ftse-100-into-the-red-2017-05-03) .

Another wave of earnings reports came into the market Thursday, helping drive shares of HSBC, Shell and RSA Insurance Group PLC (RSA.LN) to the top of the benchmark.

Read:European shares are a buy -- but watch for this Trump risk: Eaton Vance (http://www.marketwatch.com/story/european-equities-a-buy-but-trump-policy-inaction-a-risk-eaton-vance-2017-05-03)

But Next PLC (NXT.LN) shares dropped by the most since January after the clothing retailer issued a fiscal-year warning.

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Services update: The April services-sector activity reading from IHS Markit/CIPS came in at 55.8, up from 55.0 in March. That marked the fastest upturn in that sector's output since December 2016. Services make up nearly 80% of the U.K.'s gross domestic product.

The pound moved up to $1.2890, from $1.2867 late Wednesday in New York after the report.

"The strengthening of growth and the upturn in prices will bolster calls for higher interest rates. But weak growth in the consumer sector remains a concern, and is something which could intensify in coming months as consumer prices rise further," wrote Chris Williamson, chief business economist at IHS Markit.

In the first quarter, a slowdown in the services sector weighed on economic growth. GDP grew 0.3% (http://www.marketwatch.com/story/uk-economy-slows-sharply-ahead-of-election-2017-04-28), which was less than the 0.7% record in the fourth quarter of 2016, the Office for National Statistics said last week.

The dollar had been higher against the pound late Wednesday after the Federal Reserve left the door open for a June rate hike, saying the U.S. economy's first-quarter slowdown was likely the result of transitory factors (http://www.marketwatch.com/story/fed-holds-interest-rates-steady-dismisses-first-quarter-slump-as-transitory-2017-05-03).

Stock movers: HSBC shares (HSBA.LN) (HSBA.LN) climbed 3.1% after the lender posted a bigger-than-expected first-quarter profit of $3.13 billion (http://www.marketwatch.com/story/hsbc-profit-beats-views-spurring-buyback-hopes-2017-05-04), spurring anticipation the bank could buy back more shares this year.

Shell shares (RDSB.LN) (RDSB.LN) popped up 2.4% as the oil heavyweight said net profit jumped to $3.4 billion in the first quarter from $814 million for the same period in 2016.

RSA Insurance picked up 2.2% after the insurer reported a 14% rise in net written premiums (http://www.marketwatch.com/story/rsa-insurance-sees-operating-profit-ahead-of-plans-2017-05-04) to GBP1.71 billion ($2.20 billion) for the first quarter, and said operating profit was ahead of its plans.

Shares of Next (NXT.LN) dropped 6.1% after the clothing, accessories and furnishings retailer cut its full-year sales and pretax profit forecast (http://www.marketwatch.com/story/next-warns-of-full-year-sales-profit-shortfall-2017-05-04). The move comes as first-quarter sales came in at the lower end of management's expectations.

(END) Dow Jones Newswires

May 04, 2017 05:13 ET (09:13 GMT)