Pound moves closer to falling below $1.28
Continue Reading Below
The U.K.'s benchmark FTSE 100 was propelled higher Wednesday as Burberry Group PLC jumped following the luxury-retailer's financial update, and as the pound dropped to a two-week low against the dollar.
The London benchmark pushed up 0.7% to 7,380.76. All sectors advanced, led by oil and gas and consumer-goods stocks. The index was on course for its best session since July 3, FactSet data show.
Investors will watch for U.K. employment data at 9:30 a.m. London time.
"According to the consensus, U.K. wages may have grown at a slower pace of 1.8% (3m/y) in May versus 2.1% printed a month earlier. Softer wages growth should ease worries about the U.K.'s rising inflation, hence keep the [Bank of England] hawks on the sidelines and further weigh on the pound," said Ipek Ozkardeskaya, senior market analyst at London Capital Group, in a note.
Sterling stumbles: The pound was a big driver in action as it moved closer to falling below $1.28. Sterling was under pressure after Bank of England Deputy Gov. Ben Broadbent said uncertainties surrounding the outlook for the British economy makes it a difficult time to support an increase in borrowing rates.
Continue Reading Below
"In my opinion, it is a bit tricky at the moment to make a decision (to raise rates)," he told Scotland's The Press and Journal newspaper in an interview published Wednesday (http://www.marketwatch.com/story/boes-broadbent-not-ready-to-vote-for-a-rate-hike-2017-07-12). "I am not ready to do it yet."
A lower value of sterling can bolster shares of multinationals on the FTSE 100 as those companies make the bulk of their revenue and earnings in overseas markets.
Among so-called dollar earners, shares of InterContinental Hotels Group PLC (IHG) , whose brands include Holiday Inn, rose 1.5%, and equipment rental company Ashtead Group PLC (AHT.LN) gained 1.2%.
The pound bought $1.2819, compared with $1.2845 late Tuesday in New York. The pound fell below $1.28 on Tuesday after a speech by Broadbent hinted that he wasn't eager to call for interest-rate rises in the near term.
The pound was trading around eight-month lows against the euro .
Stock movers: Burberry Group PLC shares (BRBY.LN) climbed 2.9% after the high-end apparel and accessories maker said it's on track to reach its cost savings targets and that first-quarter comparable sales and underlying revenue climbed (http://www.marketwatch.com/story/burberrys-comparable-sales-lifted-by-china-2017-07-12-24853839). Retail revenue on an underlying basis rose 3% to GBP478 million.
Barratt Developments PLC (BDEV.LN) was 1.8% higher after the home builder said fiscal 2017 pretax profit is expected to rise to a more-than-expected GBP765 million (http://www.marketwatch.com/story/barratt-foresees-pretax-profit-above-expectations-2017-07-12) as it sold more expensive homes.
Among the handful of decliners on the FTSE 100, education materials publisher Pearson PLC (PSON.LN) fell 5% and software company Micro Focus International PLC (http://www.marketwatch.com/story/micro-focus-adjusted-profit-rises-2017-07-12)(MCRO.LN) shed 4.6%.
(END) Dow Jones Newswires
July 12, 2017 04:16 ET (08:16 GMT)