LONDON MARKETS: Standard Life Gains, Kingfisher Falls In London; Pound Slips

By Carla Mozee, MarketWatch

U.K. retail sales pull back in January

LONDON (MarketWatch) -- U.K. stocks hugged the flatline Friday, but a gain for shares of investment manager Standard Life PLC helped keep the benchmark FTSE 100 on track for a weekly advance.

Meanwhile, the pound slipped against the U.S. dollar after monthly U.K. retail sales fell by more than analysts had expected.

Sterling: The British currency (GBPUSD) pulled back to $1.5359 from $1.5366 after U.K. sales fell 0.3% in January, more than the 0.2% decline forecast in a FactSet poll of analysts. The pound was buying $1.5416 late Wednesday.

The Office for National Statistics noted "a significant increase in the quantity bought in petrol stations and department stores, but this did not negate the downwards pressure from predominantly food stores, textile, clothing and footwear and other stores."

But the pound's decline was softened following a report showing government borrowing fell in January, noted Fawad Razaqzada, technical analyst at Forex.com, on Friday. See: U.K. posts biggest budget surplus since 2008. (http://www.marketwatch.com/story/uk-posts-biggest-budget-surplus-since-2008-2015-02-20-5103546)

The near-term bias remains bullish above the $1.5350 level, he wrote, "but things could get ugly if the low of $1.5315 from earlier in the week is taken out. In that case, the [pound] could drop all the way to the next support at $1.5210 before making its next move."

The euro (EURGBP), meanwhile, stepped higher against sterling, buying 73.70 pence versus 73.63 pence ahead of the data. The shared currency earlier Friday had hovered around a seven-year low against the pound.

Stocks: The FTSE 100 was up less than 1 point at 6,889.39, with gains for industrial, financial and mining shares barely edging out losses for retail and consumer-goods stocks. The FTSE 100 was still in line for a weekly gain of 0.3%, which would mark its third straight weekly rise.

Standard Life was the best performer, rising 1.1% after the company said assets under management last year increased 38% to about 300 billion pounds (http://www.marketwatch.com/story/standard-life-assets-under-management-rises-38-2015-02-20) ($460 billion), aided by rising financial markets and its acquisition of Ignis Asset Management. Pretax profit rose 19% to GBP604 million.

At the bottom of the benchmark was Kingfisher PLC , the home-improvement retailer whose brands include B&Q and Screwfix. Its shares fell 2.1% following a downgrade to an underweight rating, from equalweight, at Barclays. "We do not share the bulls' optimism about a QE-led French housing-market improvement," wrote analyst Christodoulos Chaviaras. "At the same time, in the U.K., competitive pressure intensifies as B&Q remains overspaced with an inflexible cost structure."

Taylor Wimpey PLC fell 0.8% although it and competitor Bovis Homes Group PLC were named as top picks in the U.K. house building space by J.P. Morgan Cazenove, which sees 11% upside in the sector. Home builder Persimmon PLC shares were down 1.4% following the broker's downgrade to neutral from overweight.

But Bovis shares picked up 2.6%, leading advancers on the FTSE 250 index , as J.P. Morgan upgraded them to overweight from neutral.

Investors were also watching on developments out of Brussels, where eurozone finance ministers were meeting to discuss Greece's request of a loan extension (http://www.marketwatch.com/story/positive-climate-as-greeces-tsipras-speaks-with-german-chancellor-merkel-2015-02-19). Germany on Thursday rejected the Greek government's proposal.

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