LONDON MARKETS: FTSE 100 Looks For 6th Win As Oil Shares Rise, Pound Falls
24 Abril 2018 - 05:33AM
Dow Jones News
By Carla Mozee, MarketWatch
U.K. stocks rose on Tuesday, as persistent weakness in the pound
helped push the blue-chips market toward a sixth consecutive
advance.
How markets are performing
The FTSE 100 index rose 0.4% to 7,430.31, moves that put the
index on track to close above the 7,400 level for the first time
since early February. Oil and gas and utility shares fared the best
but the health care group lagged. On Monday, the index rose 0.4%
and closed at its highest since Feb. 2, according to FactSet
data.
Read:Here's why the pound got whipped this week -- and why it
may bounce back to $1.44
(http://www.marketwatch.com/story/heres-why-the-pound-got-whipped-this-week-and-why-it-may-bounce-back-to-144-2018-04-20)
The pound bought $1.3936, down from $1.3939 late Monday in New
York. In the fixed-income market, the yield on the U.K.'s 10-year
gilt was down 1 basis points to 1.506%, according to Tradeweb.
Read: Stock investors are freaking out about bonds ending a bull
run--but should they be?
(http://www.marketwatch.com/story/the-stock-market-is-freaking-out-up-about-the-bond-marketbut-should-it-be-2018-04-21)
What's driving the market
Oil and multinational companies were among the best performers,
riding on the back of higher oil prices and a lower value of the
pound, respectively. Dollar-denominated oil and Brent crude prices
were fighting off the impact of a stronger dollar ahead of a
crude-supply update from the API industry group later Tuesday.
Brent crude futures are trading around three-year highs above $75 a
barrel.
The pound was also at play as it fell closer toward the $1.39
level and was on course for a sixth straight daily loss against the
dollar. A weaker pound can help bolster shares of multinational
companies that make the bulk of their earnings and revenue in other
currencies. Sterling suffered after members in the House of Lords
on Monday voted for an amendment the U.K.'s Brexit bill to keep the
EU's human rights charter a part of British law -- seen as a defeat
for the U.K. government.
What are strategists saying?
"It is this move higher in crude oil prices, along with the rise
in demand, that is helping fuel the recent rise in yields as well
as the positive tone for equity markets, however if it continues
too far we could start to see it act as a drag on equity markets,
if prices along with yields start to move even higher," said
Michael Hewson, chief market analyst at CMC Markets, in a note.
Share movers
Shares of oil producers BP PLC (BP.LN) (BP.LN) tacked on 1.7%
and Royal Dutch Shell PLC (RDSA.LN) (RDSA.LN) rose 0.7% as oil
prices moved up.
Among multinationals, shares of consumer products heavyweight
Unilever PLC (ULVR.LN) (ULVR.LN) gained 1.3%, British American
Tobacco PLC (BATS.LN) (BATS.LN) rose 0.9%, and defense contractor
BAE Systems PLC (BA.LN) picked up 1.8%. BAE brings in 42% of its
revenue from the U.S. market, according to FactSet data.
London Stock Exchange Group PLC shares (LSE.LN) rose 0.7% as the
exchange operator said first-quarter gross profit rose 13%
(http://www.marketwatch.com/story/london-stock-exchange-profit-rises-2018-04-24)
after generating double-digit income growth for all its core
business units.
(END) Dow Jones Newswires
April 24, 2018 04:18 ET (08:18 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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