Retail sales rise; pound falls; EasyJet shares in the red
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U.K. stocks bounced higher Thursday, with Ben & Jerry's ice cream maker Unilever PLC gaining after its earnings report, one of a stream of financial releases.
Stocks remained higher after the release of a report on British retail sales, and after the European Central Bank said it will hold its key interest rates steady.
The ECB also said it will keep buying 60 billion euros of government bonds and other assets (http://www.marketwatch.com/story/ecb-stays-committed-to-qe-through-december-2017-07-20) each month through December, "or beyond, if necessary." Attention will now swing to ECB President Mario Draghi, who is holding a press conference that started at 1:30 p.m. London time, or 8:30 a.m. Eastern Time.
Check out MarketWatch's live blog of Draghi's press conference (http://blogs.marketwatch.com/thetell/2017/07/20/ecb-live-blog-mario-draghi-walks-the-policy-tightrope/)
The FTSE 100 index climbed 0.8% to 7,491.08. All sectors advanced, led by the oil and gas group. There, BP PLC (BP.LN) rose 1.6% after a Wall Street Journal report that the oil producer has approached potential buyers of its oil-and-gas production assets in the North Sea (http://www.marketwatch.com/story/bp-approaches-possible-buyers-of-north-sea-assets-2017-07-20).
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A win for the FTSE 100 on Thursday would be the blue-chip market's second in a row after it advanced 0.6% on Wednesday. (http://www.marketwatch.com/story/ftse-100-slips-as-miners-sag-but-deal-lifts-reckitt-benckiser-shares-2017-07-19)
Earnings season: More corporate results were issued Thursday. Unilever shares (ULVR.LN) picked up 1.3% after the maker of Lipton tea and Alberto Balsam hair care products said first-half net profit rose to 3.11 billion euros ($3.58 billion) and that margins should be better than previously expected over the full year. (http://www.marketwatch.com/story/unilever-posts-profit-gain-lifts-margin-guidance-2017-07-20)
But shares of EasyJet PLC (EZJ.LN) were dragged down 6.2% even as the budget airline said unit revenue turned positive (http://www.marketwatch.com/story/easyjet-quarterly-unit-revenue-turns-positive-2017-07-20) in the third quarter after a period of sharp declines.
"Despite an improvement in [the third quarter], the group still expects revenue per seat to decline by 2% across the second half as a whole, and that suggests that the key summer period has been seeing some significant discounting," wrote Laith Khalaf, senior analyst at Hargreaves Lansdown.
Anglo American PLC (AAL.LN) shares pared their gain to 0.1%. The miner raised this year's production guidance for its Kumba Iron Ore business in South Africa, and posted an 8% increase in copper equivalent production (http://www.marketwatch.com/story/anglo-american-ups-kumba-iron-ore-output-guidance-2017-07-20) in the second quarter.
Off the main benchmark, shares of Sports Direct International PLC (SPD.LN) rallied 12.8%, pushing past the sports-equipment retailer's report that a slide in the pound drove down fiscal 2017 pretax profit. (http://www.marketwatch.com/story/sports-direct-profit-hit-by-brexit-battered-pound-2017-07-20)
(http://www.marketwatch.com/story/sports-direct-profit-hit-by-brexit-battered-pound-2017-07-20)Moneysupermarket.com Group PLC shares (MONY.LN) tumbled 5.2% as the price comparison website warned adjusted operating profit will be at the lower end of market consensus for the full year. (http://www.marketwatch.com/story/moneysupermarketcom-warns-on-yearly-profit-2017-07-20)
Sterling and ECB: The pound bounced around during Thursday's session, coming off session lows after data showed U.K. retail sales rose 2.9% in June year-over-year, (http://www.marketwatch.com/story/uk-retail-sales-rebounded-in-second-quarter-2017-07-20-44855431) above a FactSet estimate of 2.6%. Sales rose by 1.5% for the second quarter.
But the pound once again starting losing ground and traded at $1.2948, compared with an intraday high of $1.3033 and with late Wednesday's settlement of $1.3025.
The FTSE 100 pushed higher as sterling fell. A stronger pound can put pressure on shares of export-focused multinational companies that pull in revenue from overseas.
Check out:Why there is a 'massive' opportunity in British leisure stocks (http://www.marketwatch.com/story/why-there-is-a-massive-opportunity-in-british-leisure-stocks-2017-07-19)
Meanwhile, the pound fell against the euro, buying EUR1.1267 before Draghi began speaking about monetary policy, compared with EUR1.1311 on Wednesday.
Traders "are looking for clues regarding what comes next," for the central bank's bond-buying program, said Craig Erlam, Oanda's senior market analyst, in an early Thursday note.
"An announcement on this is unlikely until September when it releases its new macro-economic projections but Mario Draghi may offer some insight into what we can expect during the press conference," he said.
Investors have used proceeds from sales in bonds to the ECB to buy other assets, including U.K. equities.
Read:Why Mario Draghi can't back down from ECB taper hints (http://www.marketwatch.com/story/why-mario-draghi-cant-back-down-from-ecb-taper-hints-2017-07-19)
(END) Dow Jones Newswires
July 20, 2017 08:46 ET (12:46 GMT)