LONDON MARKETS: FTSE 100 Drags, Keeping Weekly Loss On The Radar

By Carla Mozee, MarketWatch

Blue-chips benchmark down more than 2% for the week

Stocks in the U.K. slipped Friday, as shares of InterContinental Hotels Group PLC came under pressure after a trading update, and as investors round off what's set to be a losing week for equities with a look at key U.S. labor-market data.

The FTSE 100 was down 0.3% to 6,098.19, with only the utilities sector registering a gain, according to FactSet data.

Among decliners, Inmarsat PLC (ISAT.LN) shares fell 5.2%, building on Thursday's 7.2% slide after the satellite company cut its full-year sales outlook (http://www.marketwatch.com/story/inmarsat-cuts-revenue-guidance-on-energy-slowdown-2016-05-05).

Commodity shares were also in the red, with oil majors BP PLC (BP.LN) (BP.LN) and Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN)lower as oil prices struggled.

The FTSE 100 was on course for a 2.3% weekly decline. That would mark a third consecutive weekly loss, and the largest weekly pullback since the week ended Feb. 12, according to FactSet.

"Market sentiment seems to be rather cautious as traders prepare for the latest non-farm payrolls report, and one which could help to determine the chances of a rate hike by the [Fed] in June," said Richard Perry, market analyst at Hantec Markets, in a note.

"After a somewhat muted session yesterday, once more there is little real indication that traders are willing to take a view on the dollar this morning ahead of such a high volatility event," he said.

The pound was little changed at $1.4495 ahead of the April data, which are due at 1:30 p.m. London time, or 8:30 a.m. Eastern Time. Economists surveyed by MarketWatch forecast a 203,000 gain in nonfarm jobs last month (http://www.marketwatch.com/story/another-boom-in-jobs-if-not-pay-seen-in-april-payrolls-report-2016-05-05). The unemployment rate is seen dipping to 4.9% from 5%.

Meanwhile, shares of InterContinental Hotels Group PLC (IHG) fell 1.2%. The owner of the Holiday Inn, Crowe Plaza and other hotel chains said the earlier timing of the Easter holiday "had an adverse impact across the industry, especially in the Americas and Europe, which we expect to reverse in Q2." First-quarter global revenue per room rose 1.5%, said IHG.

IHG had a "slow start to 2016%, said analysts at Numis in a note. "In our view, there is increasing evidence that the U.S. hotel industry is close to a cyclical peak and that this may stimulate further consolidation in the sector."

In the mining space, BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) shares were down 1.1%. The mining heavyweight in a Friday statement said a Brazilian court on Thursday approved a restoration agreement reached in March with some Brazilian authorities over the deadly Samarco dam collapse in November.

This week, federal prosecutors in Brazil (http://www.marketwatch.com/story/mining-firms-bhp-vale-face-44b-lawsuit-in-brazil-2016-05-03) filed a civil lawsuit seeking 155 billion reals ($43.84 billion) for cleanup and remediation from BHP and Vale SA (VALE5.BR) (VALE5.BR), which run the Samarco joint venture.

(END) Dow Jones Newswires

May 06, 2016 04:52 ET (08:52 GMT)

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