Eurozone Stocks Drop, London Advances as Traders Eye Currencies

W460

Eurozone stock markets sank Friday but London rose on a weak pound after news of a surprise opinion poll two weeks before Britain's general election.

In mid-afternoon deals, Frankfurt slid 0.3 percent and Paris shed 0.2 percent, while London advanced 0.4 percent having hit another yet record peak in afternoon trading.

The euro rose further against the dollar in early European trading.

"People are just beginning to wake up to the euro at $1.12 and that makes eurozone exporters a lot less competitive than at $1.06, as it was a couple of months ago," said Will Hamlyn, investment analyst at Manulife Asset Management.

"The relative move between the UK and Europe is probably down to currency. We've seen euro strength; we've seen pound weakness," he told AFP.

However, the euro slipped below $1.12 after U.S. first quarter growth was revised sharply higher to 1.2 percent.

Meanwhile, the British pound dived Friday to a month low after a Yougov opinion poll put the opposition Labor Party just five points behind the ruling Conservatives before a June 8 general election.

That raised concerns the government's expected poll win might not be as big as expected, which could weaken its hand in Brexit talks.

Conservative Prime Minister Theresa May and Labor leader Jeremy Corbyn had suspended campaigning after Monday's suicide bombing at a Manchester pop concert, which killed 22 people including many teenagers. Election campaigning resumed on Friday.

"Sterling is trading lower across the board in the final trading session of the week with the latest poll showing a narrowing of the Conservative lead for the upcoming general election," added XTB analyst David Cheetham.

"The FTSE 100 has been boosted by the drop in the pound with the leading UK stock benchmark posting a record high not long after the open this morning."

- OPEC-inspired oil volatility -

Elsewhere, oil prices wobbled in and out of losses on Friday, having plunged almost five percent on Thursday as traders were left disappointed by OPEC's latest output cut deal.

Europe's energy sector shrugged off the market's OPEC-inspired volatility.

"It's a big move (in oil prices) but ... the large cap oil stocks have not moved as much as I would have thought," said Hamlyn.

"The reason is that these companies ... are really changing their business models to be able to cope with a much lower oil price."

Asian equities were broadly weaker, despite another record close for the S&P 500 and Nasdaq on Wall Street that come on the back of upbeat U.S. retail data. 

Wall Street opened slightly lower, with the Dow giving up a handful of points at the opening bell.

- Key figures around 1330 GMT -

London - FTSE 100: UP 0.4 percent at 7,549.63 points

Frankfurt - DAX 30: DOWN 0.3 percent at 12,584.77

Paris - CAC 40: DOWN 0.2 percent at 5,326.42

EURO STOXX 50: DOWN 0.4 percent at 3,571.99

New York - Dow: FLAT at 21,078.44 

Tokyo - Nikkei 225: DOWN 0.6 percent at 19,686.84 (close)

Hong Kong - Hang Seng: FLAT at 25,639.27 (close)

Shanghai - Composite: UP 0.1 percent at 3,110.06 (close)

Euro/dollar: DOWN at $1.1170 from $1.1208

Dollar/yen: DOWN at 111.31 yen from 111.85 yen

Pound/dollar: DOWN at $1.2813 from $1.2940

Oil - Brent North Sea: UP 11 cents at $51.57 per barrel

Oil - West Texas Intermediate: UP 08 cents at $48.98 

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