LONDON MARKETS: FTSE 100 Seeks Firm Direction, But On Course For 7th Weekly Advance

By Carla Mozee, MarketWatch

Zoopla owner in takeover deal for nearly $3 billion

U.K.'s blue-chip stocks wavered Friday, appearing ready to press pause after reaching their highest in more than three months, but the market was still set to rise for a seventh straight week.

Rounding off the week in the U.K. was a takeover deal of ZPG PLC, the owner of property website Zoopla, for more than GBP2 billion.

How markets are moving

The FTSE 100 index was down 2.3 points to 7,699.26, led lower by the utility and health care groups. But the basic materials and industrial sectors advanced. The benchmark on Thursday rose 0.5% (http://www.marketwatch.com/story/ftse-100-rises-as-rbs-jumps-after-doj-settlement-2018-05-10)

For this week, the London benchmark was looking at a gain of 1.7%. A seventh week of advances would be the longest run of wins since the week ended Jan. 12, FactSet data showed.

The pound traded at $1.3567, up from $1.3519 late Thursday in New York. Against the euro, sterling bought EUR1.1359 compared with EUR1.1345 in the prior session.

What's driving markets

The FTSE 100 has been switching between small falls and rises on Friday, looking for firm footing after two straight days of advances. Thursday's move pushed the benchmark to its highest close since Jan. 23, according to FactSet data.

There are "fairly stretched readings on most technical indicators" for the FTSE 100, wrote Bill McNamara in his daily The Technical Trader newsletter. "Although this does not amount to a sell signal per se it does imply, however, that the scope for further upside in the near-term has become limited and the chances of a pull-back of some sort have increased."

Aiding in this week's gain for the FTSE 100 was a pullback in the pound. A weaker pound tends to bolster the equity benchmark as its large multinational companies make most of their revenue and earnings overseas.

The pound suffered Thursday, falling below $1.35 intraday, after the Bank of England issued its monetary policy update and its Quarterly Inflation Report. The central bank cut its 2018 second-quarter inflation forecast to 2.4% from 2.7%, and its forecast for 2018 gross domestic product to 1.4% from 1.8%. As expected, policy makers left the key interest rate at 0.5% (http://www.marketwatch.com/story/bank-of-england-holds-key-interest-rate-at-05-cuts-inflation-and-gdp-outlooks-2018-05-10) in a 7-2 vote.

Some analysts said an August rate increase could still take place, depending on U.K. economic data which recently has fallen short of expectations.

Stock movers

Off the main benchmark, ZPG PLC shares (ZPG.LN) rallied 30% to GBP4.89 after the owner of property-listed websites Zoopla and PrimeLocation, among other brands, reached a takeover deal with U.S. private equity firm Silver Lake for GBP2.2 billion ($2.99 billion). The offer of 490 pence a share in cash is a 31% premium over ZPG's closing price Thursday of 375.20 pence.

"Silver Lake is the global leader in technology investing and I am firmly of the belief that ZPG will benefit from their technology expertise and global network which will help accelerate our growth," said ZPG's founder and Chief Executive Alex Chesterman in a statement.

Among the FTSE 100's leading decliners, water utility Severn Trent PLC (SVT.LN) fell 2.3% and rival United Utilities Group PLC (UU.LN) fell 1.7%.

ITV PLC (ITV.LN) rose 4.7%, topping the FTSE 100, extending Thursday's 6.1% jump after the broadcaster posted a 5% increase in total external revenue (http://www.marketwatch.com/story/itv-posts-higher-revenue-upbeat-forecast-2018-05-10) for the first quarter.

(END) Dow Jones Newswires

May 11, 2018 07:29 ET (11:29 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.