Surging BP helps propel FTSE 100 toward 4th day of gains
Published: May 1, 2018 4:58 a.m. ET
U.K. stocks rose for a fourth straight session on Tuesday, boosted by gains in shares of BP PLC and Just Eat PLC after well-received earnings reports from both companies.
J Sainsbury PLC shares continued to rise after news of the deal to merge with Asda, even as fresh data showed the supermarket chain lost market share over the past three months.
The pound dropped below $1.37 for the first time since mid-January, after disappointing U.K. manufacturing data were seen as making a Bank of England interest rate rise in May more unlikely. What is the market doing?
The U.K.’s FTSE 100 index UKX, +0.44% added 0.2% to 7,527.04, setting it on track for its highest close since Jan. 31, according to FactSet data.
The pound GBPUSD, -0.5812% fell to $1.3693, down from $1.3765 late Monday in New York. What is driving the market?
Corporate news was the main driver again, with a round of fresh earnings reports cheering investors. Oil giant BP PLC BP., +1.34% BP, +0.52% reported its strongest quarterly profit since mid-2014, lifted by higher oil prices and rising production. Shares climbed 1.1%, setting the stock on track for its highest close since May 2010.
Just Eat PLC JE., +4.34% said first-quarter revenue jumped 49%, sending the shares 3.7% higher to the top of the FTSE 100.
The weaker pound also helped push the FTSE 100 toward gains, as the blue-chip index lists many multinational companies, which generate most of their sales in foreign currencies. Sterling moved sharply lower after the manufacturing purchasing managers’ index for April dropped to a 17-month low of 53.9, missing forecasts of a 55.0 reading.
Traders were watching the latest in Brexit developments. Prime Minister Theresa May late Monday suffered another blow, after the U.K.’s House of Lords voted in favor of an amendment to the Brexit bill that effectively kills off the prospect of Britain leaving the European Union with no deal. Focus on supermarkets
Shares of J Sainsbury PLC SBRY, +1.55% rose 1.6%, adding to a 15% rally from Monday that came after news the supermarket chain has agreed to merge with Walmart Inc.’s WMT, +1.34% British unit, Asda Group Ltd.
Sainsbury’s gain on Tuesday came even as data from Kantar showed the chain’s U.K. grocery market share fell to 15.9% in the 12 weeks to April 22.
Among its rivals, Tesco PLC’s TSCO, -0.42% TSCDY, -1.63% market share was unchanged at 27.6%, while Asda’s share fell to 15.5%. Wm. Morrison Supermarkets PLC MRW, -2.06% shares was unchanged at 10.5%, and Waitrose’s share fell to 5.1%.
Shares of Tesco were down 0.4%, and Morrison’s dropped 1.5%. What are analysts saying?
“While adverse weather was partly to blame in February and March, there are no excuses for April’s disappointing performance, making the chances of a near term hike in interest rates by the Bank of England look increasingly remote,” said Rob Dobson, director at IHS Markit, in the PMI release.
“Business optimism has also dipped to a five-month low as concerns about Brexit, trade barriers and the overall economic climate remained widespread,” he added.
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