May 24, 2018 / 9:10 AM / in 5 months

Sterling gains hold FTSE 100 back while mid-cap earnings boost shares

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* FTSE 100 down 0.1 pct

* Retail sales beat forecasts, boosting pound

* Mediclinic tumbles after results

* Paddy Power Betfair rises on U.S. merger

* Strong earnings lift Electrocomponents, Tate & Lyle, Wizz Air

By Helen Reid

LONDON, May 24 (Reuters) - Gains in sterling sparked by better retail sales data bruised Britain’s internationally-exposed FTSE 100 index, while a recovery in commodities helped limit losses, and earnings updates drove sharp single-stock moves.

Retail sales jumped by more than expected in May, pushing sterling up and weighing on the FTSE whose constituents generally earn in foreign currencies.

Materials and industrials sectors helped limit the damage, however, while investors’ attention turned to single-stock movers.

Paddy Power Betfair was a top gainer, rising 3.1 percent after the gambling company sealed the merger of its U.S. business with fantasy sports company FanDuel, in a move to target the U.S. sports betting market that is set to open up.

“This places PPB in a strong position to participate in the deregulation of sports betting in the U.S.,” said Stifel analysts.

Goldman Sachs analysts valued the total market opportunity from U.S. liberalisation of sports betting at $36.5 billion to $60.8 billion in revenues, basing their estimates on growth trends in the more developed British and Australian markets.

Kingfisher shares fell three percent at the open, but recovered to trade up 0.2 percent, after Europe’s second largest home improvement retailer said sales in its latest quarter were hit by unusually bad weather keeping shoppers at home.

“Kingfisher’s trading update reads a little weak... but it’s tough for analysts to judge the impact of the severe weather, and management said sales improved during April and into May so far,” said Ameet Patel, senior research analyst at Northern Trust Capital Markets.

South African private healthcare group Mediclinic fell 4.2 percent after its results.

United Utilities fell 3.7 percent, bottom of the FTSE after full-year results, with traders saying the net profit had missed estimates.

Earnings kept mid-cap trading lively, with strong gains from Electrocomponents, TalkTalk and budget airline Wizz Air helping the FTSE 250 rise 0.3 percent.

Electrocomponents shares led the way, jumping 9.6 percent after the electrical equipment firm hiked its dividend and reported double-digit annual profit growth.

Tate & Lyle shares rose after the food ingredients firm reported higher annual profits.

Budget airline Wizz Air gained 4.6 percent after it delivered a confident outlook, saying profit would rise further this year.

Shares in brickmaker IBStock fell seven percent after its trading update.

“The tone of Ibstock’s trading update is subdued after a slower-than-expected start to the year (largely weather related),” said Davy analysts.

Shares in the publisher of Britain’s Daily Mail newspaper fell four percent after it delivered a cautious outlook, warning about a weak advertising market.

Britain’s FTSE 100 has been underperforming global stocks recently but analysts are turning more positive on the outlook for UK stocks, including the more domestically-focused markets.

“The FTSE 100 hit a record high this week, but the bigger story has been one of steady and notable underperformance versus other world equity markets over the last couple of years,” said UBS analysts.

“We see more interesting opportunities within the market, particularly the domestics,” they added.

Reporting by Helen Reid, Editing by William Maclean

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