LONDON MARKETS: FTSE 100 Edges Up To Fresh Record Close

By Carla Mozee and Victor Reklaitis, MarketWatch Features Dow Jones Newswires

Pound gains modestly after three weekly drops in a row

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U.K. blue-chip stocks inched up to another closing high on Monday, with medical-products supplier ConvaTec Group PLC and commodity shares helping to lead the way north, though a stronger pound kept gains in check.

What markets are doing: The FTSE 100 index rose less than 0.1% to end at 7,562.28, building on Friday's record close (http://www.marketwatch.com/story/ftse-100-on-course-for-fresh-record-as-pound-stutters-2017-11-03).

The pound fetched $1.3138, up from $1.3075 late Friday in New York. Stronger sterling can weigh on the U.K. stock benchmark as its multinational companies generate most of their sales in foreign currencies. The currency last week fell 0.4%, a third straight week of losses.

What's moving markets:Gains for metals prices (http://www.marketwatch.com/story/gold-crawls-off-of-3-month-lows-even-as-dollar-holds-gain-2017-11-06) buoyed mining shares, with iron ore futures climbing more than 2% overnight, according to BMO Capital Markets.

Meanwhile, oil benchmarks were holding around their highest in more than two years, with Brent trading above $63 a barrel, as investors assessed the implications of weekend news that dozens of high-level Saudi Arabian figures had been detained as part of an anticorruption crackdown (http://www.marketwatch.com/story/stunning-saudi-purge-solidifies-crown-princes-power-2017-11-05). Among those detained was Prince al-Waleed bin Talal (http://www.marketwatch.com/story/panic-could-set-in-after-saudi-purge-nabs-warren-buffett-of-the-middle-east-2017-11-06), one of the world's richest men.

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See: How history suggests the Saudi 'Game of Thrones' may keep going -- in one chart (http://www.marketwatch.com/story/how-history-suggests-the-saudi-game-of-thrones-may-keep-going-in-one-chart-2017-11-06)

What strategists are saying: "The week kicked off with limited appetite for stocks on news that Saudi's billionaire Prince Alwaleed bin Talal, one of the world's biggest investors, has been arrested in an anticorruption purge in Saudi Arabia," said Ipek Ozkardeskaya, senior market analyst at LCG, in a note.

"Investors will be watching what could happen to al-Waleed's holdings under his arrest and how these companies' stock prices will react to the news. For many of them, the impact should not extend beyond an eventual knee-jerk selloff. His large allocations could take a more significant hit," she wrote.

"Crown Prince Mohammed bin Salman's Saturday night purge represents a stunning political development in Saudi Arabia and a shot across the bow at the old establishment," said Helima Croft, global head of commodity strategy at RBC Capital Markets, in a note.

"We expect no immediate changes in oil policy. MBS seems strongly committed to anchoring the OPEC agreement deep into 2018 and moving ahead with the Aramco sale," she said.

Stock movers: ConvaTec Group PLC's stock (CTEC.LN) rose 3.8% after UBS analysts said the market is pricing in an "overly bearish" scenario, as they upgraded it to buy from neutral. It was the FTSE 100's biggest gainer on Monday.

Iron ore heavyweights BHP Billiton PLC (BLT.LN) (BHP.AU) and Rio Tinto PLC (RIO) rose 2.6% and 1.3%, respectively.

Oil producer Royal Dutch Shell PLC (RDSB.LN) and rival BP PLC (BP.LN) (BP.LN) both picked up 0.8%.

GlaxoSmithKline PLC (GSK.LN) closed down less than 0.1% following a ratings downgrade to hold from buy at Investec, which said it made the move following Glaxo's third-quarter results and its commentary for potential margin pressure in 2018. Investec also cut its estimate on Glaxo's 2018 earnings by 5% to 9%.

Economic data: Sales of new cars in the U.K. dropped 12.2% in October, marking the seventh straight monthly decline, the Society of Motor Manufacturers and Traders said Monday, as it also noted sales of diesel vehicles tumbled 29.9% last month.

"Declining business and consumer confidence is undoubtedly affecting demand in the new car market but this is being compounded by confusion over government policy on diesel," said Mike Hawes, Chief Executive of SMMT, in a statement.

"Consumers need urgent reassurance that the latest, low emission diesel cars on sale will not face any bans, charges or other restrictions, anywhere in the U.K.," he added.

(END) Dow Jones Newswires

November 06, 2017 11:53 ET (16:53 GMT)