Pound hamstrung by fresh election poll
U.K. stocks finished with gains Thursday, scoring their first positive close in three sessions.
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The FTSE 100 index climbed 0.3% to end at 7,543.77, helped by the pound's woes after another election poll showed a drop in support for Theresa May's governing Conservative Party.
The benchmark on Wednesday ended 0.1% lower after a choppy session (http://www.marketwatch.com/story/ftse-100-climbs-as-pound-slides-on-election-jitters-2017-05-31), dictated by sharp swings in the pound after a YouGov projection indicated the Conservative Party could lose its parliamentary majority (http://www.marketwatch.com/story/theresa-may-could-lose-majority-in-uk-election-fresh-research-finds-2017-05-31) in next week's election.
Sterling, however, recovered during Wednesday's session to trade above $1.29, after two polls showed the party is currently the leading choice among voters.
In Thursday's trade, the pound suffered again, briefly falling as low as $1.2830, compared with $1.2891 late Wednesday in New York. The dip came after a fresh poll by YouGov, commissioned by The Times newspaper, gave the Tories a three-point lead (https://www.thetimes.co.uk/edition/news/have-faith-in-me-may-fights-back-with-brexit-r9h0305kw) over the opposition Labour Party. That marks a big shift from the 20-point advantage the Conservatives had in April when the election was called.
But the pound managed to recover as Thursday's session progressed, and it was recently trading little changed for the day at $1.2888. A weaker pound tends to give a boost to the FTSE 100, as about 75% of the revenue generated by the index's companies come from abroad.
"The pound has managed to hold up fairly well despite another poll showing a narrow lead for the Conservative Party, as the focus returns to the U.K. economy," said Michael Hewson, chief market analyst at CMC Markets UK, in a note. "Another decent manufacturing report for the month of May saw decent gains in new orders."
A U.K. manufacturing purchasing managers' index slipped to 56.7 in May from 57.3 in April.
Election debate: In other election news, all the major party leaders except for May participated in a televised debate late Wednesday to discuss policies ahead of the June 8 vote.
May was heavily criticized for sending Home Secretary Amber Rudd to represent the Conservatives. The prime minister defended her decision by saying she prefers "taking questions and meeting people" on the campaign trail rather than "squabbling" with other politicians.
Read:Don't dump the British pound -- buy it, UBS says (http://www.marketwatch.com/story/dont-dump-the-british-pound-buy-it-ubs-says-2017-05-31)
Stock movers: The FTSE's big multinationals that benefit from a weak pound were among the notable gainers.
Shares in aerospace company Rolls-Royce Holdings PLC (RR.LN) (RR.LN) rose 2.1%, drug maker AstraZeneca PLC (AZN.LN) (AZN.LN) added 1.8%, and spirits company Diageo PLC (DEO) (DEO) climbed 0.7%.
Lloyds Banking Group PLC (LLOY.LN) (LLOY.LN) shares fell 0.6%. The lender said it has completed the acquisition of consumer credit card business MBNA Ltd.
(END) Dow Jones Newswires
June 01, 2017 12:35 ET (16:35 GMT)