Rio Tinto rallies after upgrade
U.K. blue-chip stocks slipped Friday, with the benchmark FTSE 100 headed toward its worst weekly performance in five months, but also as Rio Tinto PLC led gains for the key mining sector.
The FTSE 100 index turned lower, down less than 1 point at 7,118.40, feeling the weight of losses among consumer, utility and oil and gas shares. But the basic materials and financial sectors advanced.
European stocks were also dipping into negative territory.
"Trading sentiment is increasingly cautious in front of Sunday's first round of voting for the French presidential election that is too close to call," said Richard Perry, market analyst at Hantec Markets, in a note. "With so many variables according to the polls, traders do not appear willing to take a view in front of Sunday's vote and the volatility is likely to be seen early next week."
For the Easter holiday-shortened week, the London benchmark was on track for a 2.9% drop, which would be its biggest percentage decline since early November, FactSet data showed. Stocks this week were clipped by a jump in the pound above $1.28, which came after U.K. Prime Minister Theresa May unexpectedly called a snap general election for June 8.
Read:Why the snap U.K. election is a 'game changer' for the pound (http://www.marketwatch.com/story/heres-why-the-pound-surged-to-10-week-high-after-may-called-snap-uk-election-2017-04-18)
And see:What's a 'snap election' and why does Theresa May want one? (http://www.marketwatch.com/story/whats-a-snap-election-and-why-does-uk-prime-minister-theresa-may-want-one-2017-04-18)
A stronger pound puts pressure on the FTSE 100's multinational companies that make the bulk of their earnings and revenue from overseas markets.
On Friday, shares of Reckitt Benckiser Group PLC (RB.LN) were at the bottom of the index, down 1.9%. The consumer goods company, whose brands include Air Wick and Lysol, posted first-quarter revenue of 2.64 billion pounds (http://www.marketwatch.com/story/reckitt-benckiser-revenue-boosted-by-forex-rates-2017-04-21)($3.31 billion), up 15% considering foreign exchange rates.
But excluding the impact of changes in exchange rates, like-for-like revenue was unchanged. The comparison was the "toughest" for the year, given a rise of 5.2% in the first quarter of 2016, said Liberum analysts in a note.
But pushing higher were shares of Rio Tinto PLC (RIO) (RIO) (RIO), up 2.3% following an upgrade for the iron ore producer at BNP Paribas. Analysts are questioning whether a recent selloff in iron ore is overdone and are suggesting Rio Tinto shares are worth consideration for buying, Barron's wrote Friday (http://blogs.barrons.com/asiastocks/2017/04/21/iron-ore-selloff-is-overdone-time-to-buy-rio-tinto/).
Economic data: U.K. retail sales figures for March are due at 9:30 a.m. London time, or 4:30 a.m. Eastern Time. The pound was buying $1.2829 ahead of the report, compared with $1.2813 late Thursday in New York.
(END) Dow Jones Newswires
April 21, 2017 04:27 ET (08:27 GMT)