U.K. industrial, manufacturing production rise year-over-year
U.K. stocks rose Tuesday, with mining shares among advancers while investors appeared to embrace British industrial production figures that beat expectations.
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The FTSE 100 index picked up 0.2% to 7,519.38, led by financial and consumer goods shares. On Monday, the index fell 0.2% (http://www.marketwatch.com/story/uk-stocks-fall-from-2-month-high-as-pound-regains-strength-2017-10-09).
Mining shares gained Tuesday, with dollar-denominated metals such as gold and copper rising as a key U.S. dollar gauge continued to fall. Shares of copper producers Antofagasta PLC (ANTO.LN) added 1% and Fresnillo PLC (FRES.LN) moved up 1.1%. Stock in Randgold Resources PLC (RRS.LN) (RRS.LN) bulked up by 0.7%.
Data: Sterling hit an intraday high of $1.3203 Tuesday after the Office for National Statistics released August figures on industrial and manufacturing production. But the move higher for the pound didn't drag down the FTSE 100, which can come under pressure when the pound's value strengthens.
Manufacturing production, a key component of industrial output, surged 2.8% on a year-over-year basis, outstripping expectations of a 1.9% increase in a FactSet survey of economists. Industrial production rose 1.6% year-over-year, above a forecast of 0.9%.
Separately, the ONS said the U.K. trade deficit in goods widened in August (http://www.marketwatch.com/story/uk-trade-deficit-in-goods-hits-record-high-2017-10-10), largely on an increase in imports of mechanical machinery and a drop in fuel exports.
The pound eventually bought $1.3190, up from $1.3141 late Monday in New York.
But the bias for the pound is downward, said Konstantinos Anthis, a researcher at ADS Securities.
"Even though today's production data printed better than expected the PMI reports last week highlighted weaknesses across all business sectors," he wrote in a note.
"At the same time, U.K. Prime Minister Theresa May did get some renewed support from her party this week but there's still no substantial progress in the Brexit negotiations and this weighs down on her popularity inside the Conservative audience," he said.
Read:Boris Johnson in the crosshairs, as U.K. leader Theresa May gears up for key Brexit talks (http://www.marketwatch.com/story/boris-johnson-in-the-crosshairs-as-uk-leader-theresa-may-gears-up-for-key-brexit-talks-2017-10-09)
Sterling could have a hard time extending gains through technical resistance of $1.3230 unless there's a surprisingly bearish tone in minutes from the Federal Reserve's September meeting, which are due Wednesday.
Stocks in focus: Capita PLC (CPI.LN) jumped 2.2% after the outsourcing and professional services company named Jonathan Lewis as its new chief executive officer, effective Dec. 1 (http://www.marketwatch.com/story/capita-appoints-jonathan-lewis-as-new-ceo-2017-10-10-2485286).
BAE Systems PLC (BA.LN) fell 0.2% as the defense contractor said it plans to cut roughly 2,000 jobs (http://www.marketwatch.com/story/bae-systems-to-cut-almost-2000-jobs-2017-10-10) in a bid to lower costs. About 1,400 losses would come from the military aircraft division that makes Typhoon combat jets and Hawk training planes.
Financial shares were higher, with Direct Line Insurance Group PLC (DLG.LN) tacking on 1.8% and lender HSBC Holdings PLC (HSBA.LN) (HSBA.LN) up 0.9%.
Sky PLC shares (SKY.LN) were off 0.1%. The U.K. Competition Authority said it plans to examine how the proposed takeover of Sky by 21st Century Fox Inc (http://www.marketwatch.com/story/competition-watchdog-lays-out-fox-sky-probe-2017-10-10). (FOX) would affect media plurality and broadcasting standards in the U.K.
(END) Dow Jones Newswires
October 10, 2017 06:48 ET (10:48 GMT)