FTSE 100 posts fourth straight week of gains

LONDON (Reuters) – Weaker sterling helped Britain’s FTSE 100 outperform European markets on Friday, while consumer giant Reckitt Benckiser tumbled after disappointing results and Shire declined as Allergan pulled out of the running to acquire the company.

The leading UK stock index closed up 0.54% at 7368.17 points, posting a fourth straight week of gains with a 1.4% rise, its longest winning streak since mid-January.

Sterling fell after Bank of England Gov. Mark Carney dampened widespread expectations for an interest rate hike in May.

The decline supported export-oriented largecap stocks, which dominate the FTSE 100. But sterling is still up 4% this year so far, making the multinationals less attractive to investors.

The Bank of Israel on Friday set its representative rate for the British pound at NIS 4.9499.

Underneath the index level, earnings continued to set the tone for trading.

Reckitt Benckiser shares fell 2.8% after the maker of Dettol products reported that sales growth had missed expectations, including sluggish results at its Scholl footcare brand.

“Scholl continues to be a major drag on growth, suggesting that RB’s issues in this brand are not confined to a ‘one-off’ product failure but are instead more widespread, and raises questions on whether RB’s investment into gadgets is the right innovation strategy for the company,” said UBS analysts.

Shire shares fell back 3.9% after Allergan ruled out a bid for the company, whose shares have been on a roller-coaster ride as Takeda Pharmaceuticals and other bidders jostle to acquire it.

“It’s disappointing there are not two companies after it, but on the other hand it should spur Shire management to be more proactive and come up with a decent defense and outline their longer term prospects,” said Paul Mumford, fund manager at Cavendish Asset Management.

The drugmaker’s shares had spiked to a more than eight-month high on Thursday after Reuters reported Shire rejected Takeda Pharmaceuticals’ $63 billion offer for the firm.

CRH shares gained 4.1% after the Irish building materials company’s CEO told the Irish Times the group was reviewing the possibility of a share buyback and a listing of part of its US business.

“We believe the odds of [a US spin-off] remain low given the CEO’s comments around synergies from having a globally integrated group,” said analysts at Davy Research.

Tobacco companies British American Tobacco and Imperial Brands recovered slightly from Thursday’s slump when weak results from Philip Morris in the US dented cigarette makers. The stocks were up 1.4% and 2%, respectively.

They also benefited from the weaker sterling, as they make most of their earnings in foreign markets.

In the FTSE 250, pub operator Greene King was the stand-out faller, down 3.1% after Berenberg cut its price target on the stock, reiterating a “sell” rating.

“In our view, the company is having to pedal increasingly hard to maintain current levels of sales across its estate,” said analysts at the German broker.