Admiral shares hit hard after earnings report
U.K. stocks climbed Wednesday, with BHP Billiton PLC's gain helping to guide the market toward a third consecutive advance, while investors waited for monthly data on British wages and unemployment.
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The FTSE 100 moved up 0.7% to 7,434.239. The index on Tuesday rose 0.4%, (http://www.marketwatch.com/story/uk-stocks-rise-for-2nd-straight-day-ahead-of-key-inflation-data-2017-08-15) aided by a slide in the pound after a weaker-than-expected reading on inflation.
The unchanged reading in July inflation would cut the Bank of England's need to raise interest rates to tackle rising prices. Investors will again gauge what could be next for monetary policy with the release of data on earnings and hiring in June at 9:30 a.m. London time, or 4:30 a.m. Eastern Time, from the Office for National Statistics.
Ahead of that, shares of BHP Billiton (BLT.LN) (BHP.AU) (BHP.AU) drove 2% higher after activist investor Elliott Management Corp. said it's raised its holding in the mining heavyweight (http://www.marketwatch.com/story/elliott-management-increases-stake-in-bhp-billiton-2017-08-15) to 5% of BHP's London-listed shares. Elliott also signaled it backs the incoming chairman to act on sweeping changes it's been seeking.
EasyJet PLC shares (EZJ.LN) were up 3.2%, extending gains from Tuesday following news that Air Berlin PLC filed for insolvency.
Air Berlin's "disappearance from the scene means that lots of valuable runway slots across Europe have suddenly become available and although the expectation is that Lufthansa will acquire many of them there was also talk that easyJet would be bidding for a share of them," wrote Bill McNamara, technical analyst at Charles Stanley.
But shares of Admiral Group PLC (ADM.LN) sank 8% as the insurer's first-half profit increased but did see an impact from the higher cost of personal injury claims.
"Most of the adverse impact from the increase in the costs of large injury claims, resulting from the change in the Ogden discount rate, was captured in our 2016 second half result. However, some extra costs carry into 2017," Admiral said in its earnings report.
Data: Economists polled by FactSet expect average weekly earnings to have risen by 1.9% excluding bonuses in June, and by 1.8% including bonuses. The unemployment rate is expected to remain at 4.5%.
Before the data release, the pound traded at $1.2871, compared with $1.2869 late Tuesday in New York.
(END) Dow Jones Newswires
August 16, 2017 04:15 ET (08:15 GMT)