By Victor Reklaitis, MarketWatch
U.K. stocks closed higher Friday, as they got a boost from Unilever PLC’s jump on deal news and the pound’s drop following discouraging retail sales.
The FTSE 100 /quotes/zigman/3173262/delayed UK:UKX +0.18% rose by 0.3% to end at 7,299.96, after trading in the red in morning action. The blue-chip benchmark scored a 0.6% gain for the week and finished just below a one-month closing high hit Wednesday.
Shares in consumer-products giant Unilever PLC /quotes/zigman/409909/delayed UK:ULVR +0.31% /quotes/zigman/202185/composite UN -0.14% /quotes/zigman/203077/composite UL -0.27% soared 13%, powered by U.S. packaged-foods heavyweight Kraft Heinz Co. /quotes/zigman/54335842/composite KHC +1.24% announcing that it made a merger proposal to Unilever that was declined.
The pound /quotes/zigman/16008140/realtime/sampled GBPUSD -0.5755% was trading at $1.2416, down from $1.2494 late Thursday, as traders reacted to a January report on U.K. retail sales . The report showed a month-over-month drop of 0.3%, missing forecasts for a rise.
The retail sales number was “really weak,” showing British consumers are starting to feel the squeeze due to a pickup in inflation, said Naeem Aslam, chief market analyst at Think Markets UK, in a note.
“The net impact on the currency after the data was bad, and we have seen traders putting more short trades against the sterling-dollar pair,” he added.
The FTSE 100 lifted off its session low as sterling slumped. A weaker pound often boosts the London benchmark as around 75% of FTSE companies’ sales come from overseas in other currencies.
U.K. investors on Thursday also digested U.S. President Donald Trump’s lengthy press conference on Thursday, in which he said he “inherited a mess” at home and abroad, and blasted the news media.
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Other movers: Coca-Cola HBC AG’s shares /quotes/zigman/15946248/delayed UK:CCH +1.56% closed 4% higher for the FTSE 100’s second-biggest gain. The stock built on Thursday’s jump of 4.9%, which came after the bottling company said profit rose last year.
AstraZeneca PLC /quotes/zigman/244926/delayed UK:AZN +0.92% /quotes/zigman/134653/composite AZN +0.43% rose 1.6% after the drug company announced positive results from a trial of its breast cancer treatment Lynparza.
Asia-focused bank Standard Chartered PLC /quotes/zigman/22532/delayed UK:STAN -0.41% gave up 4.4% for the FTSE’s largest loss.