LONDON MARKETS: FTSE 100 Lifted By Rising Supermarket Stocks, Weaker Pound

By Carla Mozee, MarketWatch Features Dow Jones Newswires

U.K. blue-chip stocks advanced on Tuesday , with supermarket shares marching higher after private retail sales data and a ratings upgrade for Tesco PLC. The market overall also got a lift as the pound was pulled lower on political concerns.

Continue Reading Below

What markets are doing: The FTSE 100 index was up 0.3% at 7,362.55, led by gains for shares in consumer goods and services, oil and gas and financial companies. But the basic materials and technology groups were losing ground. The benchmark on Monday rose 0.5% (http://www.marketwatch.com/story/ftse-100-leaps-propelled-by-progress-on-us-tax-cuts-2017-12-04).

The pound traded at $1.3389, down from $1.3478 late Monday in New York. Against the euro, sterling bought EUR1.1306, less than EUR1.1360 on Monday.

What's moving markets: Supermarket chain Tesco landed a ratings upgrade from Goldman Sachs, sending its shares to the top of the FTSE 100. Overall, consumer-related shares were higher after the British Retail Consortium and KPMG said retail sales in November rose 1.5% year-over-year following a dip in October. Food sales were the biggest part of that growth. But BRC-KPMG did note that Black Friday sales resulted in a "meagre" rise of 0.6% in like-for-like sales in November.

Meanwhile, a continued pullback in the pound aided shares of multinational companies, as they make the bulk of their earnings overseas. Sterling was jolted Monday after U.K. Prime Minister Theresa May and European Commission President Jean-Claude Juncker said they hadn't been able to reach an agreement on some Brexit issues. British officials have been working to settle some issues before EU leaders meet at a summit on Dec. 14-15.

The pound had jumped through $1.35 on Monday following reports that an agreement on avoiding a post-Brexit hard border between the Republic of Ireland and Northern Ireland was getting close, but the deal was reportedly shot down by Northern Ireland's Democratic Unionist Party. The DUP struck a support deal with May's party earlier this year.

Continue Reading Below

Stock movers: Tesco PLC (TSCO.LN) (TSCO.LN) climbed 3.6% after Goldman Sachs raised its rating on the supermarket chain to buy from sell. Shares of rival J Sainsbury PLC (SBRY.LN) rose 2.2% and shares of Wm. Morrison Supermarkets PLC (MRW.LN) rose 3.3%.

Mining shares were mostly lower even as data showed activity in China's services sector expanded in November, which would bode well for the world's second-largest economy, where companies are a major buyer of industrial and precious metals.

Anglo American PLC (AAL.LN) and Rio Tinto PLC (RIO) (RIO) (RIO) fell 0.8%, and Glencore PLC (GLEN.LN) gave up 1.6%. But Randgold Resources PLC (RRS.LN) (RRS.LN) was up 1%.

Economic data: A reading on U.K. services activity is due at 9:30 a.m. London time, or 4:30 a.m. Eastern Time from IHS Markit and CIPS. Analysts polled by FactSet are looking for a reading of 55.0.

(END) Dow Jones Newswires

December 05, 2017 04:08 ET (09:08 GMT)