U.K. stocks highest in six weeks, with Royal Bank of Scotland Group PLC climbing after a well-received earnings report, while the pound dropped against the dollar after a stronger-than-expected U.S. jobs report for July.
The FTSE 100 index rose 0.5% to end at 7,511.71, the best finish since June 19, according to data from FactSet. All but the utilities and health-care sectors marked gains. For the week, the benchmark sprang up 2%, the biggest weekly rise since December.
RBS back in black: Shares of Royal Bank of Scotland Group PLC (RBS.LN) (RBS.LN) notched a 2% gain, although they closed off session highs. The advance came after the lender posted its first half-year profit in three years (http://www.marketwatch.com/story/rbs-swings-to-profit-as-one-off-effect-fades-2017-08-04), despite a $5.5 billion U.S. settlement fine. The bank swung to a profit of GBP939 million ($1.23 billion).
“A looming fine for mis-selling mortgage-backed securities in the U.S. casts a long shadow, but the omens are looking a lot more promising for a return to private ownership,” said Neil Wilson, senior market analyst at ETX Capital, in a note.
“Based on these figures, the return to genuine sustained profitability in 2018 appears a lot more realistic,” he said.
RBS was bailed out by the U.K. government during the financial crisis in 2008, and it is still majority owned by the state. In the year-ago period, it paid the U.K. government more than GBP1 billion for the right to pay dividends.
Pound a leg down: U.K. stocks were driven to intraday highs in afternoon trade as the pound was shoved as low as $1.3033 against the dollar . The greenback bounced up against major rivals after data showed the U.S. economy added 209,000 jobs in July (http://www.marketwatch.com/story/us-gains-209000-jobs-in-july-unemployment-retouches-16-year-low-of-43-2017-08-04), while wage growth met expectations with a 0.3% rate.