LONDON MARKETS: FTSE 100 Marches Higher As BP Climbs, Rolls-Royce Rallies

By Carla Mozee, MarketWatch Features Dow Jones Newswires

Manufacturing activity accelerates in July

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U.K. blue-chip stocks advanced Tuesday, with BP PLC and Rolls-Royce Holdings PLC each powering higher after respective earnings reports from the oil major and the engine manufacturer, while data on British manufacturing activity outstripped expectations.

The FTSE 100 jumped 0.7% to close at 7,423.66. The benchmark on Monday closed up 0.1% (http://www.marketwatch.com/story/ftse-100-lifted-by-shares-of-miners-hsbc-2017-07-31), and logged a July rise of 0.8%.

Read:July's best-performing assets--in charts (http://www.marketwatch.com/story/julys-best-performing-assetsin-charts-2017-07-31)

Stock movers: A number of FTSE 100 constituents enjoyed big gains in their share prices Tuesday.

Rolls-Royce Holdings PLC (RR.LN) (RR.LN) zoomed up 10% and logged its best session in more than a year as the aircraft engine maker swung to a first-half net profit of GBP1.6 billion (http://www.marketwatch.com/story/rolls-royce-swings-to-profit-amid-turnaround-push-2017-08-01)($2.1 billion) amid signs of improvement from its turnaround plan.

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BP PLC shares (BP.LN)(BP.LN) climbed 2.4% as the oil producer swung to a profit in the second quarter (http://www.marketwatch.com/story/bp-swings-to-profit-on-higher-crude-prices-2017-08-01) of $553 million, and demonstrated its ability to generate cash again. Oil and gas production rose 9.9%.

Intertek PLC (ITRK.LN) sprang up 9.2%, for its strongest day in two years as the testing services company hiked its half-year dividend by 21.1% (http://www.marketwatch.com/story/intertek-profit-rises-on-non-oil-performance-2017-08-01) to 23.5 pence. First-half profit rose to GBP134.3 million ($177.3 million).

Direct Line Insurance Group PLC (DLG.LN) also sharply raised its interim dividend (http://www.marketwatch.com/story/direct-line-profit-climbs-hikes-interim-dividend-2017-08-01), and the auto insurance provider's shares leapt 5.5%. First-half net profit rose to GBP275.5 million ($363.7 million).

Taylor Wimpey PLC (TW.LN) ended higher by 1.9% after the home builder said it would pay a special dividend of 10.4 pence a share (http://www.marketwatch.com/story/taylor-wimpey-profit-falls-plans-special-dividend-2017-08-01). The company did post a 24% fall in first-half pretax profit as it booked a previously announced exceptional charge.

Among the few decliners on the FTSE 100, Fresnillo PLC (FRES.LN) fell 2.6% even as the precious metals miner said first-half pretax profit rose 52% to $387.4 million (http://www.marketwatch.com/story/fresnillo-pretax-profit-up-52-on-mine-boost-2017-08-01).

Meanwhile, British American Tobacco PLC shares (BATS.LN) (BATS.LN) closed 2.5% higher, even as the Lucky Strike cigarettes maker said the U.K.'s Serious Fraud Office has opened a formal investigation into the company (http://www.marketwatch.com/story/uk-fraud-squad-investigating-bat-for-misconduct-2017-08-01) related to allegations of misconduct in Africa.

Over the previous two sessions, BAT shares were yanked down more than 11% after the U.S. Food and Drug Administration on Friday proposed lowering nicotine in cigarettes to nonaddictive levels.

Read:Cigarette maker stocks plunge on FDA announcement, but health experts are skeptical (http://www.marketwatch.com/story/cigarette-maker-stocks-plunge-on-fda-announcement-but-health-experts-are-skeptical-2017-07-28)

(http://www.marketwatch.com/story/cigarette-maker-stocks-plunge-on-fda-announcement-but-health-experts-are-skeptical-2017-07-28)Outside the main London index, shares of AA PLC (AA.LN) plunged 14% after the roadside assistance company said it has removed executive chairman Bob Mackenzie (http://www.marketwatch.com/story/aa-plunges-12-in-london-after-chairman-removed-for-gross-misconduct-2017-08-01) with immediate effect for "gross misconduct".

Manufacturers on the move: Strength in exports that boosted orders contributed to an acceleration in U.K. manufacturing activity in July (http://www.marketwatch.com/story/uk-manufacturing-activity-picks-up-in-july-2017-08-01). The purchasing managers index for manufacturing rose to 55.1, said IHS Markit/CIPS, higher than an expected reading of 54.5.

"The upbeat report showed improving economic conditions around the world, as a reduction in inflation pressures helped manufacturers in July," said Jake Trask, FX research director at OFX, in a note.

The data arrived ahead of this week's so-called Super Thursday at the Bank of England, as policy makers will release their latest rate decision, minutes from their meeting and their August Inflation Report.

"Holders of sterling will be crossing their fingers for a surprise interest rate rise. However, disappointing second-quarter GDP figures and a recent unexpected drop in consumer-price index make this highly unlikely, especially with Kristin Forbes--who previously voted for a rise in rates--having left the committee," said Trask.

The pound rose to an intraday high of $1.3244 after the manufacturing report, up from $1.3215 late Monday, when sterling hit a 10-month high against the dollar. The pound eventually drifted back to $1.3209 during Tuesday's dealings.

(END) Dow Jones Newswires

August 01, 2017 12:19 ET (16:19 GMT)