Robust earnings support Britain's FTSE ahead of U.S. jobs data

Reuters - UK Focus

* FTSE 100 edges up 0.1 pct

* RBS (LSE: RBS.L - news) , InterContinental Hotels (Other OTC: ICHGF - news) jump after earnings

* Earnings in the UK outperforming Europe

* AstraZeneca (NYSE: AZN - news) rejects Pfizer (NYSE: PFE - news) 's raised bid

By Tricia Wright and Alistair Smout

LONDON, May 2 (Reuters) - Britain's top share index heldsteady ahead of closely watched U.S. jobs data on Friday withRoyal Bank of Scotland and InterContinental Hotels the most notable risers.

Shares in AstraZeneca, which have surged almost 30percent since U.S. rival Pfizer indicated in April it wanted tobuy the British drugmaker, changed little after a sweetened $106billion takeover bid was rejected by AstraZeneca's board.

Part-nationalised RBS surged almost 8 percent after treblingits profit in the first quarter, benefiting from improved costcontrol and a reduction in losses from bad loans.

Jefferies said the bank's earnings were more than twiceconsensus estimates, with impairments 48 percent below forecast.

Also rising after strong results was InterContinental HotelsGroup, which proposed a special dividend along with itsstrongest room revenue performance in seven quarters. Its sharesjumped 8.4 percent.

"InterContinental has delivered a stellar performance.Growth in revenue per available room is ahead of expectation ...while the return of hotel sale proceeds in the form of a specialdividend is ahead of schedule," Hargreaves Lansdown Stockbrokersequity analyst Keith Bowman said.

RBS and IHG helped to bring the FTSE 100 slightlyinto positive territory, up 7.35 points, or 0.1 percent, at6,816.22 points by 1031 GMT, a fresh two-month high.

Of companies that have reported quarterly earnings so far,82 percent of FTSE 100 companies have beaten or metexpectations, compared to 57 percent of STOXX Europe 600 companies.

However, only 18 percent have met or beaten forecasts forrevenues on the FTSE 100, Thomson Reuters StarMine data showed.

"(The StarMine) figures tell you everything you need toknow. There's been greater weakness in the top line in general,and the bottom line has been artificially boosted by things likeshare buybacks," said Charles Stanley (LSE: CAY.L - news) analyst JeremyBatstone-Carr.

Equity markets have been buoyed in the last two weeks by aburst of deal-making and bids largely in the healthcare sector.

Shares in AstraZeneca were 0.3 percent lower at 4,802.5pence on Friday after the company's board rejected Pfizer's revised offer of 50 pounds ($84.47) a share, saying itsubstantially undervalued the drugmaker.

Other stocks without earnings newsflow saw only limitedmoves ahead of closely watched U.S. non-farm payrolls at 1230GMT. A Reuters poll forecast the U.S. economy to have added210,000 jobs in April, up from a gain of 192,000 in March.

"Indices are treading water until we get this out of theway, but with the momentum still with the bulls in an improvingglobal economy, any short-term dip on the back of a miss shouldstill be met with demand," said Mike McCudden, head ofderivatives at Interactive Investor.

($1 = 0.5919 British Pounds) (Editing by Catherine Evans)

View Comments (0)