Barratt shares rise after bright forecast
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U.K. stocks finished at a seven-week high Wednesday, as commodity-related shares rose and as the pound's march toward a six-month high slowed a day before the Bank of England's policy update.
The FTSE 100 gained 0.6% to end at 7,385.24 after choppy moves earlier in the session. The blue-chip index scored its highest close since March 20, according to FactSet data.
Resource shares on the move: Oil producers BP PLC (BP.LN) (BP.LN) and Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) finished up by 1.1% and 1.3%, respectively, as oil prices extended gains. The U.S. Energy Information Administration said weekly crude supplies dropped by 5.2 million barrels (http://www.marketwatch.com/story/oil-prices-extend-gains-as-eia-reports-larger-than-expected-drop-in-us-crude-supplies-2017-05-10), more than the expected decline of 1.8 million barrels in an S&P Global Platts consensus forecast.
WTI oil futures and Brent crude futures were up about 3%.
The FTSE 100's climb of 0.6% in the prior session was aided by gains for mining shares, which have recently been hurt amid a tumble in prices of industrial metals.
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Mining shares were mostly higher on Wednesday, even as Chinese data showed that a decline in commodity prices weighed on Chinese producer prices in April. (http://www.marketwatch.com/story/china-consumer-inflation-edged-up-in-april-2017-05-10)
Anglo American PLC (AAL.LN) drove up 2.1%, iron ore producer BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) picked up 1.2% and Randgold Resources Ltd. (RRS.LN) advanced 0.8%.
Sterling in focus: Investors were also keeping watch on the pound against the dollar, as a stronger sterling can hurt shares of multinational companies listed on the FTSE 100 that make the bulk of their profit and revenue overseas.
Sterling was trading at $1.2941, backing off an intraday high of $1.2988.
Among multinationals, luxury-goods maker Burberry Group PLC (BRBY.LN) tacked on 1.4% and drugmaker GlaxoSmithKline PLC (GSK.LN) rose 1.6%. Associated British Foods PLC (ABF.LN), which makes sugar and is behind the Ovaltine and Twinings brand, was 2.4% higher.
The pound hasn't traded above $1.30 since early October, according to FactSet data.
The moves came before the Thursday release of the Bank of England's inflation report and interest rate decision. Investors will look for signs policy makers may be shifting closer to a rate increase.
"If [Monetary Policy Committee member Kristin] Forbes can persuade at least one other MPC member to vote for a rate hike...then we could see sterling bid up well clear of $1.30," said Neil Wilson, senior market analyst at ETX Capital, in a note Wednesday.
The pound bought $1.2935 late Tuesday.
Other stock movers: Barratt Developments PLC's shares (BDEV.LN) rose 2.3% as the property developer said fiscal 2017 pretax profit will come in at top end of analysts' expectations (http://www.marketwatch.com/story/barratt-sees-2017-profit-at-top-end-of-views-2017-05-10) of between 675 million pounds ($847.2 million) and GBP733 million.
ITV PLC (ITV.LN) was down 2.3% after the broadcaster posted a fall in first-quarter revenue (http://www.marketwatch.com/story/itv-maintains-outlook-even-as-revenue-falls-2017-05-10), but kept its full-year guidance unchanged.
Centrica PLC shares (CNA.LN) were up 1.6% ahead of the British Gas parent trading without dividend rights on Thursday.
(END) Dow Jones Newswires
May 10, 2017 12:09 ET (16:09 GMT)