By Helen Reid
LONDON (Reuters) - British shares climbed on Friday after weaker than expected GDP data triggered a slide in sterling, while Royal Bank of Scotland shares fell after its first-quarter results.
UK growth slowed much more sharply than expected in the first quarter, sending the pound to a two-month low against the dollar
Sterling's fall boosted multinational dollar-earners on the FTSE 100 (FTSE), helping it jump 1 percent to its highest since Feb. 1, just before a rolling global sell-off spread across markets.
UK-listed consumer staples stocks, which overwhelmingly make earnings in dollars and translate them back into sterling, all made gains as the pound fell.
Diageo (L:DGE), Unilever (L:ULVR), British American Tobacco (L:BATS) and Imperial Brands (L:IMB) all rose 1.6 to 2.9 percent, the biggest boosts to the FTSE. Burberry (L:BRBY) also gained 3.1 percent.
The index of major UK companies sealed its fifth straight week of gains, its longest winning streak since January.
Results dominated trading, with RBS down 1.6 percent and among the worst-performing European banks (SX7P).
RBS (L:RBS) shares fell despite the bank reporting a much stronger than expected pre-tax profit of 792 million pounds ($1.10 billion) in the first quarter, as costs from legal fines and restructuring fell.
Investors are still awaiting the outcome of the U.S. Department of Justice's investigation into alleged historical U.S. residential mortgage-backed securities mis-selling, analysts said, also noting a deterioration in net promoter scores.
"In particular, the negative and deteriorating net promoter scores in NatWest-branded business banking ... look awful," wrote Jefferies analyst Joseph Dickerson.
A revival in tech stocks helped the broader regional markets make gains, with Europe's tech sector (SX8P) near a six-week high.
Shares in investment trust Scottish Mortgage (L:SMT), which holds many of the heavyweight U.S. tech stocks, rose 3 percent after strong results from Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) sent the stocks soaring in Wall Street trading.
Overall sentiment towards the UK has improved, with several big brokers raising their recommendation on the market in the past weeks. Investors still have their doubts, however.
"In the UK while we remain broadly positive there are a lot of headwinds as the Brexit negotiations continue. The market will swing on news on a daily basis," said Gary Waite, portfolio manager at Walker Crips.
"It's got the lowest growth rate among developed economies, so on a relative trade the marginal capital is better deployed in emerging markets, U.S. and Japanese equities."
In other results-driven moves, Madame Tussauds owner Merlin Entertainments (L:MERL) gained 4.7 percent, rising to the top of the FTSE 250 after reporting trading in line with expectations.
The group said visits to its London attractions were however still suffering from the impact of last year's militant attacks in Britain.
Carpetright (L:CPRC) shares rose 6.4 percent on the small-cap index (FTSC) after the struggling retailer's creditors and landlords approved its restructuring plan.
