British GDP estimate downwardly revised
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After switching between small gains and losses, U.K. stocks ended slightly higher on Thursday as the impact from a weaker pound outweighed a drop for energy companies after OPEC agreed to extend output curbs.
The FTSE 100 eked out a gain of less than 0.1% to end at 7,517.71.
Oil companies posted some of the biggest losses in the benchmark, as oil prices slid roughly 3% (http://www.marketwatch.com/story/oil-reverses-some-losses-as-investors-get-ready-for-opec-meeting-2017-05-25) after the Organization of the Petroleum Exporting Countries agreed to extend their production cuts by nine months. However, they stopped short of deepening the cuts, which some traders had hoped for.
Cuts of 1.8 million barrels a day were initially agreed in November as a way to tackle global oversupply and bring balance back to the market that has suffered from falling prices over the past three years.
"Tellingly, oil prices have not fully recovered the highs reached after the supply cuts were announced last November," said Jasper Lawler, senior market analyst, at London Capital Group, in a note.
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"The persistently high U.S. oil production has added skepticism in the market that wasn't there at the last OPEC meeting. We see a better than 50/50 chance OPEC pre-announces additional cuts before the next scheduled meeting in November," he added.
Read:4 potential outcomes for OPEC's crucial meeting (http://www.marketwatch.com/story/4-potential-outcomes-for-opecs-crucial-meeting-2017-05-19)
Shares of BP PLC (BP.LN) (BP.LN) dropped 1.1%, while Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) gave up 0.5%.
The energy group has a roughly 14% weighting on the FTSE 100.
Petrofac plunges: Meanwhile, over on the midcap FTSE 250, shares of Petrofac Ltd. (PFC.LN) plunged 30% after the oil services company said it suspended Chief Operating Officer Marwan Chedid until further notice (http://www.marketwatch.com/story/petrofac-suspends-coo-as-uk-conducts-probe-2017-05-25). Petrofac is under U.K. investigation on suspicion of bribery, corruption and money laundering, and the company has said it's cooperating with authorities. Chedid has resigned from Petrofac's board.
GDP: Stocks briefly dipped after the Office for National Statistics said the U.K.'s first-quarter gross domestic product estimate was revised lower, to growth of 0.2% from a flash reading of 0.3% (http://www.marketwatch.com/story/uk-first-quarter-gdp-growth-revised-down-to-02-2017-05-25). The reduction stemmed mainly from downward revisions within the services sector, said ONS.
"It would appear the economic reliance on the consumer is finally taking its toll with higher prices seen as contributing to the softer activity in the first quarter," wrote Craig Erlam, senior market analyst at Oanda.
"With wages now falling in real terms, this doesn't bode well for the coming quarters and while the Brexit vote may have taken a little longer than many expected to harm the economy, it would appear that the initial pain is starting to be felt."
The pound touched an intraday high of $1.3015 as the GDP report was released, but eventually pulled back to $1.2960, down from $1.2973 late Wednesday in New York.
A weaker pound can boost the FTSE 100 as about 75% of the revenues for the index's companies are generated overseas.
Read:Seeing another rate hike 'soon,' Fed outlines plan to reduce bondholdings, minutes show (http://www.marketwatch.com/story/seeing-another-rate-hike-soon-fed-outlines-plan-to-reduce-bond-holdings-minutes-show-2017-05-24)
(END) Dow Jones Newswires
May 25, 2017 11:59 ET (15:59 GMT)