Robust earnings support UK's FTSE

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London - Britain's top share index held steady ahead of closely watched U.S. jobs data on Friday with Royal Bank of Scotland and InterContinental Hotels the most notable risers.

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

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

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

Also rising after strong results was InterContinental Hotels Group, which proposed a special dividend along with its strongest room revenue performance in seven quarters. Its shares jumped 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 special dividend is ahead of schedule,” Hargreaves Lansdown Stockbrokers equity analyst Keith Bowman said.

RBS and IHG helped to bring the FTSE 100 slightly into positive territory, up 7.35 points, or 0.1 percent, at 6,816.22 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 met expectations, compared to 57 percent of STOXX Europe 600 companies.

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

“(The StarMine) figures tell you everything you need to know. There's been greater weakness in the top line in general, and the bottom line has been artificially boosted by things like share buybacks,” said Charles Stanley analyst Jeremy Batstone-Carr.

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

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

Other stocks without earnings newsflow saw only limited moves ahead of closely watched U.S. non-farm payrolls at 1230 GMT. A Reuters poll forecast the U.S. economy to have added 210,000 jobs in April, up from a gain of 192,000 in March.

“Indices are treading water until we get this out of the way, but with the momentum still with the bulls in an improving global economy, any short-term dip on the back of a miss should still be met with demand,” said Mike McCudden, head of derivatives at Interactive Investor.

Reuters


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