Robust earnings, U.S. jobs data push FTSE to 2-month high

Reuters - UK Focus

* FTSE 100 advances 0.2 pct

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

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

By Tricia Wright

LONDON, May 2 (Reuters) - Britain's top share index hit atwo-month closing high on Friday as investors welcomed strongU.S. jobs growth, with RBS and InterContinental Hotels the most notable risers on the back of robust earnings.

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

Part-nationalised Royal Bank of Scotland surged 8.2 percentafter trebling its profit in the first quarter, benefiting fromimproved cost control 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 robust results was InterContinental HotelsGroup, which proposed a special dividend along with itsstrongest room revenue performance in seven quarters. Its sharesjumped 8.2 percent as well.

"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.

Non-farm payrolls showed the U.S. economy added 288,000 jobsin April, beating a 210,000 consensus forecast and fuelling theview that the world's biggest economy is regaining pace afterbad weather hit growth early in the year.

RBS, IHG and the encouraging U.S. data helped lift the FTSE100 by 13.55 points, or 0.2 percent, to 6,822.42 points,its highest close since March 4.

While flagging that the FTSE 100 has come up against strongresistance around the 6,800 level before, traders wereoptimistic about the UK benchmark's near-term prospects.

"Risk appetite seems to be back on the table," said MattBasi, head of sales trading at CMC Markets.

"If we can really build a solid footing at these levels ...then there's a chance that we could really push on and have alook at that 7,000 level for the first time."

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 0.1 percent lower at 4,768 penceon Friday after the board rejected Pfizer's revisedoffer of 50 pounds ($84.47) a share, saying it substantiallyundervalued the drugmaker. ($1 = 0.5919 British pounds) (Additional reporting by Alistair Smout; Editing by SonyaHepinstall)

View Comments (0)