Tesco falls after data show loss of market share
Continue Reading Below
U.K. stocks advanced on Wednesday, boosted by a slump in the pound after a new voting estimate showed Theresa May's Conservative Party may lose its majority in the general election next week.
The FTSE 100 index added 0.2% to 7,542.94, partly recovering from its 0.3% loss on Tuesday. The index was closed Monday for a bank holiday.
A fall for sterling was seen as driving the market action on Wednesday, with the pound falling to $1.2818 from $1.2860 late Tuesday in New York. The loss came after a YouGov estimate, commissioned by the Times newspaper, indicated that the Conservatives might lose 20 seats in the June 8 election. That means May's party would lose its current majority in parliament, which is has had since the election in 2015.
Labour, on the other hand, is expected to gain 28 seats. A few weeks ago, the Tories stood to increase their majority substantially. Investors had been pushing the pound above $1.30 on hopes a bigger Conservative majority would strengthen May's hand in the upcoming Brexit negotiations with Brussels.
"This sterling weakness has offered a helpful translational boost for the FTSE's army of foreign earning stocks as the index brushes off weakness in commodities overnight (iron ore -4.2%; nickel at 11-month lows) as Chinese Manufacturing PMI was reported in-line with expectations," said analysts at Accendo Markets in a note.
Continue Reading Below
Among the FTSE's big multinationals, Unilever PLC (ULVR.LN) (ULVR.LN) climbed 0.9%, British American Tobacco PLC (BATS.LN) (BATS.LN) gained 0.7% and Diageo PLC (DEO) (DEO) climbed 0.7%.
British Airways-parent International Consolidated Airlines Group SA (IAG.LN) (IAG.LN) rose 0.9%, rebounding in part from a 1.4% loss on Tuesday that came after a far-reaching computer failure at BA left thousands of passengers stranded over the weekend.
Read:The bill for British Airways's IT carnage? $111 million, Citi estimates (http://www.marketwatch.com/story/the-bill-for-british-airwayss-it-carnage-111-million-citi-estimates-2017-05-29)
Miners curbed the gains for the FTSE 100 after China's official manufacturing purchasing managers' index was unchanged in May at 51.2 (http://www.marketwatch.com/story/chinese-factory-activity-holds-steady-in-may-2017-05-31). China is a major user of natural resources, so any growth indications from the country tend to drive prices of metals.
Shares of Rio Tinto PLC (RIO) (RIO) (RIO) dropped 1.9%, Anglo American PLC (AAL.LN) fell 1.8% and BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) lost 1.7%.
Also moving lower, shares of Tesco PLC (TSCO.LN) (TSCO.LN) gave up 1.3% after the latest Kantar data on U.K. supermarkets showed the grocer's market share fell to 27.8% in the 12 weeks to May 21.
J Sainsbury PLC's (SBRY.LN) (SBRY.LN) market share fell to 15.9%, but shares were up 0.1%.
(END) Dow Jones Newswires
May 31, 2017 04:34 ET (08:34 GMT)