Debenhams shares tank after profit warning
U.K. stocks rose for a second straight session on Thursday, with energy companies among the biggest gainers as oil prices continued their rally to trade around a three-year high.
What is the market doing: The FTSE 100 index added 0.1% to 7,677.76, setting it on track for its highest close since Friday, Dec. 29, when it scored an all-time high.
The pound bought $1.3559, compared with $1.3516 late Wednesday in New York.
What is driving the market: Oil companies helped drive the upbeat trading mood in London as crude prices extended their rally from Wednesday. West Texas Intermediate oil climbed 0.3% to $61.81 a barrel, trading around its highest level since December 2014 (http://www.marketwatch.com/story/crude-oil-jumps-to-3-year-high-as-iran-tensions-spark-supply-fears-2018-01-04).
The oil gains came as antigovernment protests continued in Iran. There are fears that the riots, which have left more than 20 people dead, may lead to disruption to crude output from OPEC's third-largest producer, which would limit global oil supply and support prices.
U.K. stocks remained higher after the country's services purchasing managers' index beat forecasts by rising to 54.2 in December from 53.8 in November. That was a welcome change from the PMIs on the manufacturing and construction PMIs, out on Tuesday and Wednesday respectively, that missed expectations and showed a slowdown in activity.
In other U.K. data, the number of new mortgage approvals rose only marginally in November (http://www.marketwatch.com/story/uk-housing-market-losing-more-steam-data-show-2018-01-04), another sign the housing market is slowing down. The report came alongside house price data from Nationwide Building Society hat showed house prices in the U.K. rose 2.6% on year in December, down from growth of 4.5% a year earlier.
What are strategists saying: "There are further gains for oil shares, which continue to ride the coattails of a further increase in crude prices," said Lee Wild, head of equity strategy at Interactive Investor, in a note.
"There have been major outages over the past few months in the North Sea and Libya, and now markets are pricing in an outside chance that domestic tension in Iran could threaten supply. Oilfield strikes look unlikely just now, but Donald Trump could use any brutal crackdown by the regime there to reintroduce sanctions. Do that and Royal Dutch Shell and BP, already at multiyear highs, will go better still," he added.
Stock movers: Among major oil companies, shares of BP PLC (BP.LN) (BP.LN) added 0.8%, and Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) put on 0.4%. On the FTSE 250 index , Tullow Oil (TLW.LN) climbed 2.3%.
Whitbread PLC (WTB.LN) rose 0.7% after the hospitality group and owner of the Costa Coffee and Premier Inn brands said Adam Crozier will take over as chairman (http://www.marketwatch.com/story/whitbread-appoints-adam-crozier-as-chairman-2018-01-04) after Richard Baker retires from the company's board on Feb. 28.
NMC Health PLC (NMC.LN) climbed 4.2% after the healthcare provider said it had bought the outstanding stakes that it didn't already own in hospitals in the United Arab Emirates for $218 million.
Outside the major London indexes, shares of Debenhams PLC (DEB.LN) plunged 14% after the department store chain warned on profit (http://www.marketwatch.com/story/debenhams-warns-on-profit-after-disappointing-christmas-sales-2018-01-04) after disappointing sales.
"The first week of post-Christmas sale was below expectations despite further markdown investment, particularly in the highly seasonal gift category," Debenhams said in a statement.
(END) Dow Jones Newswires
January 04, 2018 07:45 ET (12:45 GMT)