DAILY TRADING STRATEGY

Friday, Apr 20

UK OVERVIEW
U.K. stocks extended their win streak to three sessions on Thursday, boosted by gains for miners on a rally in nickel and aluminum prices. The British pound initially declined after a disappointing reading on U.K. retail sales, but later bounced back somewhat to trade near $1.42. The FTSE 100 index edged up 0.2% to end at 7,328.92, building on a 1.3% rally from Wednesday. The London benchmark notched its highest close since Feb. 5, or more than 10 weeks ago. The pound dropped to an intraday low of $1.4162, but rebounded to trade recently at $1.4185. Sterling bought $1.4205 late Wednesday in New York. A weaker pound tends to prop up the British blue-chip index, as its multinational companies generate most of their sales in foreign currencies. A continued rally in oil and metals helped lift the FTSE 100, which is heavily skewed toward the commodity sector. 
Nickel prices were trading at their highest since 2014, up around 15% so far this week. They were getting a lift from concerns that Russian nickel producer Norilsk Nickel will be included in U.S. sanctions on Moscow. 
Sanctions on major Russian aluminum producer United Coareseen as having helped lift aluminum prices to their highest level in more than six years. The metal was continuing its rally on Thursday. 
Oil prices were also rising sharply. Brent futures added more than 1% and were trading at the highest level since 2014, boosted by U.S. supply data out on Wednesday. Oil traders were looking ahead to the outcome of the joint Organization of the Petroleum Exporting Countries and non-OPEC ministerial monitoring committee meeting, expected to be held on Friday. Data from the Office for National Statistics showed retail sales dropped 1.2% in the U.K. in March, month-on-month. Analysts had forecast a 0.4% decline, according to FactSet. The reading comes on the heels of disappointing wage and inflation data published earlier in the week, which were seen as easing pressure on the Bank of England to hike rates more than once this year. Shares of Shire PLC jumped 5.9%, on course for their best session in three weeks, after the drug maker rejected a $60 billion takeover bid from Japan’s Takeda Pharmaceutical Co. 4502, -4.59% TKPYY, -0.42% but said the two sides are still in talks. Separately, Allergan PLC said it’s in the “early stages” of a possible bid for Shire. British American Tobacco PLC and Imperial Brands dropped 5.4% and 2.9%, respectively, alongside a slide in rival Philip Morris International Inc. after 
the company’s first-quarter revenue fell short of expectations. Rentokil Initial PLC posted one of the biggest gains in the FTSE 100, up 4.5%. The advance came after the pest control company said ongoing revenue—which excludes the effects of disposed or closed businesses—rose 11% in the first quarter. 


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