YouGov poll has Tories holding smaller lead over Labour Party
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The U.K.'s benchmark for blue-chip stocks was at an all-time high Friday, as the pound dropped against major rivals after a poll showed a further narrowing of the Conservative Party's lead before the general election.
The FTSE 100 was up a modest 0.2% to 7,534.13, but losses for financial and oil and gas shares limited the overall gain. Still, the index notched an intraday high of 7,535.06, according to FactSet data. For the week, the benchmark was on track for a gain of 0.8%.
Friday's session kicked off with the pound under pressure and oil prices flipping higher after an OPEC-related selloff.
The pound bought $1.2875, yanked below $1.29 for the first time since May 18, according to FactSet data. That took place after a YouGov poll for The Times newspaper (https://www.thetimes.co.uk/article/tory-lead-cut-to-five-points-as-corbyn-closes-in-on-may-rgmckfnpp) released Friday showed the lead for the ruling Conservative Party has been cut to 5 percentage points over the Labour Party ahead of the June 8 election.
A weaker sterling can benefit the FTSE 100, which is heavily weighted by multinational companies that make the bulk of their revenue and earnings in foreign-denominated currencies.
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Among such companies, shares of Hikma Pharmaceuticals PLC (HIK.LN) rose 1.2% and GlaxoSmithKline PLC (GSK.LN)picked up 1.1% and consumer products heavyweight Unilever PLC (ULVR.LN) tacked on 0.9%.
"In our view, fresh polls showing that the gap between these two parties continues to narrow could prove negative for sterling, on concerns that [U.K. Prime Minister] Theresa May and the Conservatives may not secure the strong majority they are seeking in Parliament," wrote Marios Hadjikyriacos, analyst at IronFX, in a note.
The "British pound could become increasingly more sensitive to incoming polls as we approach Election Day, given that polls released just a few days ahead of the event may capture voters' sentiment more accurately and thereby, carry more importance for investors," he said.
The pound was up roughly 1% against the Japanese yen , and the euro advanced to 87.22 pence against sterling.
Meanwhile, shares of BP PLC (BP.LN) (BP.LN) and Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) were each down 0.1%, but pared losses as oil prices turned higher. Oil prices had dropped (http://www.marketwatch.com/story/oil-reverses-some-losses-as-investors-get-ready-for-opec-meeting-2017-05-25) after the Organization of the Petroleum Exporting Countries agreed to extend their production cuts by nine months. However, they stopped short of deepening the cuts.
The energy group has a roughly 14% weighting on the FTSE 100.
(END) Dow Jones Newswires
May 26, 2017 04:30 ET (08:30 GMT)