LONDON MARKETS: FTSE 100 Flirts With 7-week High As Oil Shares Climb

Barratt shares rise after bright forecast

U.K. stocks advanced toward a seven-week high Wednesday, as commodity shares rose and as the pound's march toward a six-month high slowed a day before the Bank of England's policy update.

The FTSE 100 was up 0.7% to 7,391.31 after choppy moves earlier in the session. The index was getting closer to 7,400, where it hasn't traded above since March 21, FactSet data showed. Oil and gas, utility and financial shares were top sector performers, but tech and industrial shares lagged behind.

Investors were also keeping watch on the pound against the dollar, as a stronger sterling can hurt shares of multinational companies listed on the FTSE 100 that make the bulk of their profit and revenue overseas.

Sterling was trading at $1.2932, backing off an intraday high of $1.2986.

Among multinationals, luxury-goods maker Burberry Group PLC (BRBY.LN) tacked on 1.8% and drug maker GlaxoSmithKline PLC (GSK.LN) rose 1.3%. Associated British Foods PLC (ABF.LN) , which makes sugar and is behind the Ovaltine and Twinings brand, was 2.5% higher.

The pound hasn't traded above $1.30 since early October, according to FactSet data.

The moves came before the Thursday release of the Bank of England's inflation report and interest rate decision. Investors will look for signs policy makers may be shifting closer to a rate hike.

"If [Monetary Policy Committee member Kristen] Forbes can persuade at least one other MPC member to vote for a rate hike ... then we could see sterling bid up well clear of $1.30," said Neil Wilson, senior market analyst at ETX Capital, in a note early Wednesday.

The pound bought $1.2935 late Tuesday.

Resource shares on the move: Oil producers BP PLC (BP.LN) (BP.LN) and Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) were up 1.4% and 1.6%, respectively, as oil prices extended gains. The U.S. Energy Information Administration said weekly crude supplies dropped by 5.2 million barrels (http://www.marketwatch.com/story/oil-prices-extend-gains-as-eia-reports-larger-than-expected-drop-in-us-crude-supplies-2017-05-10), more than the expected decline of 1.8 million barrels in an S&P Global Platts consensus forecast.

WTI oil futures popped up nearly 3% and Brent crude futures rose 2.5%.

The FTSE 100's climb of 0.6% in the prior session was aided by gains for mining shares, which have recently been hurt amid a tumble in prices of industrial metals.

Mining shares were mostly higher on Wednesday, even as Chinese data showed that a decline in commodity prices weighed on Chinese producer prices in April. (http://www.marketwatch.com/story/china-consumer-inflation-edged-up-in-april-2017-05-10)

Anglo American PLC (AAL.LN) drove up 2.8%, iron ore producer BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) picked up 1.7% and Randgold Resources Ltd. (RRS.LN) advanced 1.4%.

Stock movers: Barratt Developments PLC (BDEV.LN) shares rose 3% as the property developer said fiscal 2017 pretax profit will come in at top end of analysts' expectations (http://www.marketwatch.com/story/barratt-sees-2017-profit-at-top-end-of-views-2017-05-10) of between 675 million pounds ($847.2 million) and GBP733 million.

ITV PLC (ITV.LN) was down 2.5% after the broadcaster posted a fall in first-quarter revenue (http://www.marketwatch.com/story/itv-maintains-outlook-even-as-revenue-falls-2017-05-10), but kept its full-year guidance unchanged.

Hikma Pharmaceuticals PLC (HIK.LN) fell 0.9% ahead of an expected decision from the U.S. Food and Drug Administration about whether it can make a generic version of Glaxo's Advair asthma drug.

Centrica PLC shares (CNA.LN) were up 2.5% ahead of British Gas parent trading without dividend rights on Thursday.

(END) Dow Jones Newswires

May 10, 2017 10:59 ET (14:59 GMT)