LONDON MARKETS: FTSE 100 Drives Higher Despite Next Gloom, As Commodity Stocks Spread Cheer

By Carla Mozee, MarketWatch Features Dow Jones Newswires

Retailers dragged lower as Next turns more cautious on outlook

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U.K. stocks marched higher Wednesday, with commodity shares guiding the way. But Next PLC shares tumbled after the clothing and homeware retailer struck a cautious tone in its quarterly earnings report.

Investors were also preparing to get one of the first reads on the health of the British economy in the fourth quarter, ahead of the Bank of England rate decision Thursday.

What markets are doing: The FTSE 100 index rose 0.4% to 7,526.52, led by the basic materials and industrials sectors. But consumer services and utility shares fell. On Tuesday, the London benchmark rose 0.1% (http://www.marketwatch.com/story/ftse-100-advances-as-bp-shares-rally-to-3-year-high-2017-10-31). It also logged an October gain of 1.6%, the best monthly performance since May.

Meanwhile, the pound fetched $1.3302, up from $1.3283 late Tuesday in New York. Against the euro, sterling bought EUR1.1421, up from EUR1.1404 in the previous session.

Retailers in focus: Shares of Next PLC (NXT.LN) dropped 7% after the clothing and homeware retailer narrowed its pretax profit and sales guidance (http://www.marketwatch.com/story/next-sales-rise-narrows-guidance-on-profit-2017-11-01) for the year. Third-quarter sales were up 1.3% on the year, buoyed by rising directory sales as retail sales fell 7.7%.

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Shares of other retailers fell, with Marks & Spencer Group PLC (MKS.LN) off 3.3% and Primark parent Associated British Foods PLC (ABF.LN) fell 2.6%.

What's moving markets: Shares of commodity producers strengthened alongside a rise in prices for metals and oil. Copper futures jumped 1.5% and oil futures climbed 1%.

Data released early Wednesday from Caixin showed Chinese factory activity held steady in October, indicating a stable pace of expansion (http://www.marketwatch.com/story/china-caixin-manufacturing-pmi-holds-steady-2017-10-31). Shares of mining companies can be sensitive to economic data out of China, as the country is a major buyer of industrial and precious metals.

Meanwhile, oil prices were trading around two-year highs, supported by talk that members of the Organization of the Petroleum Exporting Countries and other producers will extend production cuts beyond the current end date of March 2018 when they meet next week.

While earnings season remains in full swing, investors are also getting ready for key releases from central banks later this week. They will watch for what the U.S. Federal Reserve is signaling about the path of interest rates when it releases its policy decision after trading closes in Europe Wednesday. And on Thursday, the Bank of England is expected to raise the U.K.'s benchmark interest rate by a quarter-percentage point to 0.5%.

Read:5 things investors need to know as the Bank of England prepares for historic rate hike (http://www.marketwatch.com/story/5-things-investors-need-to-know-as-the-bank-of-england-prepares-for-historic-rate-hike-2017-10-31)

Also: Fed statement may have treats for the hawks and the doves (http://www.marketwatch.com/story/fed-statement-may-have-treats-for-both-hawks-and-doves-2017-10-27)

Stock movers: Paddy Power Betfair PLC reported underlying earnings grew 7.1% (http://www.marketwatch.com/story/paddy-power-betfair-earnings-rise-lifts-guidance-2017-11-01) in the quarter ended Sept. 30, as it slightly raised its full-year guidance. Shares rose 3.4%.

Indivior PLC (INDV.LN) shares rallied 10%. The pharmaceutical company said Wednesday a U.S. Food and Drug Administration committee has voted to recommend approval of its drug RBP-6000 (http://www.marketwatch.com/story/indivior-opioid-addiction-drug-gets-fda-nod-2017-11-01) for the treatment of opioid use disorder.

In the mining group, copper producer Antofagasta PLC (ANTO.LN) jumped 2.5%, Anglo American PLC (AAL.LN) picked up 3.3%, and Glencore PLC (GLEN.LN) rose 2.5%.

Oil producer BP PLC (BP.LN) (BP.LN) was up 0.9% and Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) moved up 0.4%.

Economic docket: IHS Markit/CIPS will release its purchasing managers index for November at 9:30 a.m. London time, or 5:30 a.m. Eastern Time, with analysts polled by FactSet expecting a reading of 55.9.

U.K. house prices rose 0.2% in October (http://www.marketwatch.com/story/uk-house-prices-step-higher-in-october-2017-11-01), compared with 0.4% growth the previous month, according to data from the Nationwide Building Society on Wednesday. Prices were up 2.5% on the year, a touch higher than forecasts.

(END) Dow Jones Newswires

November 01, 2017 05:17 ET (09:17 GMT)