LONDON MARKETS: FTSE 100 Advances As BP Shares Rally To 3-year High

By Carla Mozee, MarketWatch Features Dow Jones Newswires

WPP offers downbeat outlook

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Stocks in the U.K. rose on Tuesday, and a jump in BP PLC shares after the oil major's quarterly results could help the blue-chip market wrap up October trade with a win.

What markets are doing: The FTSE 100 index rose 0.3% to 7,510.39, led by the oil and gas and utility sectors. But the consumer goods and services and basic materials sectors were among those moving lower. On Monday, the index fell 0.2% (http://www.marketwatch.com/story/ftse-100-set-for-first-loss-in-3-sessions-as-homebuilders-hsbc-fall-2017-10-30).

For October, the London benchmark was on course to rise 1.6%, which would be its best monthly performance since May, FactSet data showed.

The pound traded at $1.3214, up slightly from $1.3207 late Monday in New York. Sterling has lost roughly 1.4% against the dollar during the month.

What's moving markets: Investors are sifting through another round of earnings reports. Shares of BP, the FTSE 100's fourth-largest constituent, were gaining the most in seven months, but downbeat guidance from WPP PLC, the world's largest advertising group, prompted investors to drag its shares lower.

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Markets are moving closer to Thursday's Bank of England meeting, at which Gov. Mark Carney and other policy makers may raise the key rate by a quarter-percentage point to 0.5%. While Carney has signaled rates may be raised, he's also cautioned that British consumers are feeling the squeeze from stronger inflation and weaker wages.

U.K. consumer confidence slipped in October, with GfK saying it's index declined by one point to minus 10.

"It's no surprise that the Overall Index Score continues to bump along in negative territory this month. As concerns about the wider economic prospects for the U.K. economy dampen our outlook, consumers are showing no real 'get-up-and-go,'" said Joe Staton, head of market dynamics at GfK, in a statement.

Stocks: BP shares (BP.LN)(BP.LN) rallied 3.5% to trade at their highest since July 2014 as the oil producer said it will restart its share buyback program, supported by strong cash generation so far this year. BP's third-quarter underlying replacement cost profit was $1.87 billion, above consensus expectations of $1.58 billion (http://www.marketwatch.com/story/bp-to-restart-share-buybacks-after-production-rise-2017-10-31), according to Reuters.

Shares of WPP (WPP.LN) (WPP.LN) were off 0.2%, but pared deeper gains. The company said it now expects like-for-like revenue and net sales growth to be broadly flat for the year (http://www.marketwatch.com/story/wpp-like-for-like-sales-fall-turnover-up-2017-10-31). Net like-for-like sales--a measure used to judge the company's underlying performance--fell 1.1%.

Croda International PLC (CRDA.LN) shares leapt 4.4% as the specialty chemicals maker backed its full-year guidance (http://www.marketwatch.com/story/croda-saes-rise-backs-full-year-guidance-2017-10-31) and said third-quarter sales rose 6% GBP334.6 million ($440.8 million).

EasyJet PLC (EZJ.LN) were up 2.2%, rising alongside a 5% climb in shares of budget carrier Ryanair Holdings PLC . Ryanair stuck with its full-year earnings target (http://www.marketwatch.com/story/ryanair-earnings-fall-sticks-with-guidance-2017-10-31) even as its quarterly net profit was dented by compensation costs for passengers. Ryanair in September and October canceled thousands of flights because of problems scheduling staff.

What strategists are saying:

"Markets still assign an 86% probability that the [Bank of England] will raise rates for the first time in 10 years this Thursday, which means the consequences of not doing so are likely to be brutal on the pound," said CMC Markets chief market analyst Michael Hewson in a note.

(END) Dow Jones Newswires

October 31, 2017 05:21 ET (09:21 GMT)