LONDON MARKETS: FTSE 100 Creeps Up As BP Shares Hit 3-year High, But Burberry Falls

By Carla Mozee, MarketWatch Features Dow Jones Newswires

Blue-chip benchmark set for 7th monthly gain in 8; Royal Mail shares under pressure

Continue Reading Below

U.K.'s blue-chip stocks edged up Tuesday, set to lock in a rise for October, as BP PLC shares jumped after the oil major's quarterly results. But shares of Burberry Group PLC were hurt after news a key executive will be leaving the luxury goods maker.

What markets are doing: The FTSE 100 index latched onto to a 0.1% rise at 7,495.89, led by the oil and gas and utility sectors. But the consumer goods, basic materials and industrial 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 picked up 1.6%, which would be its best monthly performance since May, FactSet data showed.

The pound traded at $1.3216, 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, hit their highest since July 2014 during the session, in the wake of the oil producer's results. WPP PLC, the world's largest advertising group, issued downbeat guidance but its shares were able to flip higher during the session.

Continue Reading Below

Markets are moving closer to Thursday's Bank of England meeting, at which Gov. Mark Carney and other policy makers may raise the benchmark interest 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 Tuesday.

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.

Stocks: BP shares (BP.LN)(BP.LN) climbed 2.2%. They had risen as much as 4% to GBP5.22 each as the oil producer said it will restart its share buyback program. 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.

Burberry (BRBY.LN) shares fell 0.7%, and had lost as much as 3.4% intraday, after the maker of high-end clothing and accessories said creative head Christopher Bailey will leave at the end of 2018 (http://www.marketwatch.com/story/burberry-creative-head-christopher-bailey-quits-2017-10-31). Bailey last year was forced to relinquish the CEO role.

Royal Mail PLC (RMG.LN) dropped 5% as the carrier's rating was started at hold by Berenberg. The investment bank said the company's core business is facing pressure, including what Berenberg expects to be a decline in volumes for addressed mail, according to Dow Jones Newswires.

Shares of WPP (WPP.LN) (WPP.LN) rose 2.4%. They had fallen earlier in the session after the ad heavyweight 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 3.3% 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) was up 2.6%, rising alongside a 7% surge 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.

(END) Dow Jones Newswires

October 31, 2017 08:57 ET (12:57 GMT)