Booker Group Share News (BOK)

LONDON (Alliance News) - UK stocks closed modestly higher on Friday, with investors awaiting a joint press conference from UK Prime Minister Theresa May and US President Donald Trump, while US fourth quarter gross domestic product came in below forecasts.

The US Commerce Department said GDP increased by 1.9% in the fourth quarter of 2016 following a 3.5% jump in the third quarter. Economists had expected GDP to climb by 2.2%.

The bigger than expected slowdown in the pace of GDP growth was partly due to the impact of trade amid a sharp pullback in soybean exports. Total US exports tumbled by 4.3% in the fourth quarter, while imports surged by 8.3% following a 2.2% increase in the previous quarter. Trade subsequently reduced GDP by 1.7 percentage points in the fourth quarter after contributing 0.85 percentage points in the third quarter.

Lloyds Bank said the weaker-than-expected growth may temper expectations for the US Federal Reserve's future rate increases, though it noted that the meeting next week is already expected to result in no change to policy.

"It may, however, mean that the Fed will sound less upbeat about recent economic developments than would have been the case if the data had matched expectations," Lloyds said. "In particular, Fed policymakers may be tempted to note that as the weakness was due to international trade rather than domestic demand, the figures in part reflect an adverse impact from the strong US dollar."

In a separate report, the US Commerce Department said durable goods orders fell by 0.4% in December after tumbling by a revised 4.8% in November. The dip came as a surprise to economists, who had expected durable goods orders to jump by 2.6% following the 4.5% slump that had been reported for the previous month.

The dollar's reaction to the data was relatively muted. At the London stock market close the pound traded the dollar at USD1.2533, compared to USD1.2571 at the close on Thursday. The euro was quoted at USD1.0695 at the close Friday versus USD1.0664 on Thursday.

The FTSE 100 ended the day up 0.3%, or 23.00 points, at 7,184,49, but over the course of the week ended down 0.2%. The FTSE 250 closed up on Friday 0.3%, or 48.14 points, at 18,190.80, and up 0.2% for the week. The AIM All-Share ended up 0.6%, or 5.51 points, at 881.19, ending the week 0.9% higher.

The BATS UK 100 index closed up 0.4% at 12,142.75, the BATS 250 ended up 0.3% at 16,529.15, and the BATS Small Companies closed flat at 10,860.34

In mainland Europe, the CAC 40 in Paris closed down 0.6% and the DAX 30 in Frankfurt ended down 0.3%.

On Wall Street at the London close, the DJIA and S&P 500 were down 0.1% and the Nasdaq Composite was flat.

Investors are awaiting a press conference from UK and US leaders May and Trump in Washington at 1800 GMT. The meeting is Trump's first official engagement with a foreign leader since his inauguration on Friday last week.

UK corporate news was dominated by Tesco's surprise GBP3.70 billion cash and shares takeover of mid-cap food wholesaler Booker Group, a deal which will combine the UK's largest supermarket with its biggest cash-and-carry company.

Under the terms of the deal, Booker shareholders will get 0.861 of a Tesco share and 42.60 pence in cash for each of their shares. The deal values Booker at 205.30p per share, a premium of around 12% to its closing price of 183.10p on Thursday.

On Friday, Tesco closed as the biggest blue-chip gainer, up 9.3% at 206.64p, while Booker was the best FTSE 250 performer, up 17% at 213.82p.

Tesco said consumers will benefit from an improved selection of fresh food available at more outlets in the UK and from an expanded network of convenience outlets to pick up click-and-collect orders.

Catering, retail and small business customers of Booker will benefit from a bigger range of products, better value thanks to improved sourcing, and an enhanced delivery service through combining the respective Tesco and Booker fleets.

Gold miner Fresnillo ended up 2.7%, the second best FTSE 100 performer, while Centamin, up 5%, was the second best performer on the FTSE 250. That was after the gold price rebounded from its intraday low.

Gold has been sliding during the last few days and on Friday hit a low of USD1,181.10 an ounce, but by the European equities close traded at USD1,189.03 an ounce. At the close on Thursday gold was quoted at USD1,187.01.

Oil prices fell on Friday, with Brent oil trading at USD55.36 at the close compared to USD56.37 a barrel on Thursday.

In the economic calendar on Sunday, Japanese retail trade is at 2350 GMT. On Monday, a number of surveys by the European Commission on the eurozone economy are at 1000 GMT, German consumer price index is at 1300 GMT and US personal consumption expenditure is at 1330 GMT. US pending home sales are at 1500 GMT and the Dallas Federal Reserve manufacturing index is at 1530 GMT.

In the UK corporate calendar, there is a trading statement from flooring company James Halstead and third quarter results from European regional airline Flybe Group. Alcohol distributor and wholesaler Conviviality and microwave electronic products manufacturer Filtronic both report interim results and environmental technologies group Porvair reports full-year results.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

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