'Prepare for interest rates to go higher,' says Bank of England policy maker
U.K. stocks rose Wednesday, buoyed by gains for home builders and miners, as investors grappled with rising geopolitical tensions over North Korea and waited for an update on the U.K. services sector.
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The FTSE 100 was up 0.3% at 7,382, but it had been darting between small gains and losses as trading got under way. The basic materials, consumer goods and financial sectors were higher, but the utilities and health care groups pulled back. The London benchmark on Tuesday fell 0.3% (http://www.marketwatch.com/story/ftse-100-falls-back-into-the-red-as-oil-majors-and-miners-decline-2017-07-04), the fifth decline in six sessions.
Miners in focus: In the mining group, Glencore PLC (GLEN.LN) rose 1.9%, Antofagasta PLC (ANTO.LN) gained 1.1%, and BHP Billiton PLC (BLT.LN) (BHP.AU) picked up 1.6%.
But shares of precious-metals producers Fresnillo PLC (FRES.LN) and Randgold Resources Ltd. (RRS.LN) fell, losing 1.1% and 1% respectively, after gaining in the previous session in tandem with gold.
Gold prices on Wednesday were up 0.4% at $1,224.30, as the haven asset extended gains from Tuesday. Those moves came after North Korea said its successfully test-launched an intercontinental ballistic missile, which dropped into seas near Japan. The U.S. confirmed the missile launched was capable of reaching the continental U.S. and called for global action.
Read:U.S. calls for action after North Korea successfully launches long-range missile (http://www.marketwatch.com/story/us-calls-for-action-after-north-korea-successfully-launches-long-range-missile-2017-07-05)
Home builders: Persimmon PLC (PSN.LN) climbed 4.3% after the home builder said first-half revenue rose 12% (http://www.marketwatch.com/story/persimmon-revenue-up-12-on-higher-sales-2017-07-05) as it sold more homes at a higher price.
Shares of home builder Barratt Developments PLC (BDEV.LN) moved up 2.6%, and Taylor Wimpey PLC (TW.LN) claimed a 1.6% rise.
Other movers: Ocado Group PLC (OCDO.LN) gained 1.5% on the FTSE 250 index . The online grocery delivery company said its first-half revenue rose (http://www.marketwatch.com/story/ocado-profit-falls-on-distribution-center-costs-2017-07-05), but pretax profit fell on costs of opening a new distribution center and other investments.
Shares of Ocado partner Wm Morrison Supermarkets PLC (MRW.LN) were up 0.8%.
On the FTSE 100, decliners included GlaxoSmithKline PLC (GSK.LN) , down 1.3% after a downgrade by Citi analysts to neutral from buy. Also losing ground, British gas parent Centrica PLC (CNA.LN) shed 0.4%.
Economic docket: The release of the U.K. services purchasing managers' index for June is expected at 9:30 a.m. London time, or 4:30 a.m. Eastern Time.
The pound fetched $1.2925, little changed from $1.2920 late Tuesday, ahead of the services update.
Read:The Brexit bill for U.K. banks? Up to $17 billion, warns financial industry group (http://www.marketwatch.com/story/the-brexit-bill-for-uk-banks-up-to-17-billion-warns-financial-industry-group-2017-07-03)
Central banks were in focus after Bank of England policy maker Michael Saunders told the Guardian newspaper (https://www.theguardian.com/business/2017/jul/04/bank-of-england-michael-saunders-interest-rates-mpc-brexit) in an interview published Tuesday that British households should "prepare for interest rates to go higher at some point."
Wednesday marks 10 years since the last time the BOE hiked interest rates.
See:3 reasons why the BOE should raise rates for the first time in a decade (http://www.marketwatch.com/story/3-reasons-why-the-bank-of-england-should-raise-interest-rates-for-the-first-time-in-a-decade-2017-07-04)
Investors will also scrutinize minutes from the U.S. Federal Reserve's most recent meeting, due for release later Wednesday, for clues to the central bank's path on interest rates.
(END) Dow Jones Newswires
July 05, 2017 04:29 ET (08:29 GMT)