LONDON MARKETS: FTSE 100 Gets A Lift From Supermarket Stocks, Softer Pound
20 September 2017 - 2:17AM
Dow Jones News
By Carla Mozee, MarketWatch
U.K. stocks rose Tuesday, aided by gains for supermarket shares
and a pullback from around 15-month highs in the pound against the
U.S. dollar.
The FTSE 100 index rose 0.3% to close at 7,275.25, adding to a
0.5% rise on Monday
(http://www.marketwatch.com/story/ftse-100-reaches-for-first-gain-in-5-sessions-as-geopolitical-tensions-ease-2017-09-18),
when the benchmark breaking a four-session losing streak.
Investors will turn their attention to the U.S. Federal Reserve,
which was set to begin its two-day policy meeting on Tuesday. The
Fed is widely expected on Wednesday to say it will start reducing
its $4.5 trillion portfolio of government securities.
The FTSE 100 pushed higher Tuesday as the pound struggled to
stay above $1.35. The pound in recent sessions has hit its highest
since last year's Brexit vote on expectations the Bank of England
is preparing for a rate hike.
Read:HSBC reverses bearish pound view after BOE rate hints
(http://www.marketwatch.com/story/we-were-wrong-hsbc-reverses-bearish-pound-view-after-boe-rate-hints-2017-09-18)
Pound strength can hurt earnings made overseas by multinational
companies, or so-called dollar earners. Sterling bought $1.3510
around the time of the European close, after trading as high as
$1.3553 and as low as $1.3468 earlier in the day.
The U.S. dollar on Tuesday was also swinging between gains and
losses ahead of the Fed decision.
"The probability of a December [Fed] rate hike rose to 50%, too
low to trigger a panic across the stock markets yet too high to be
ruled out by the currency and money markets. The U.S. 10-year yield
advanced to 2.22%, the 3-month average," said Ipek Ozkardeskaya,
senior market analyst, at London Capital Group.
Higher yields can bode well for net interest margin at banks, so
investors will keep watch on global bank stocks in anticipation of
the Fed's possible announcement to begin a massive bond sale.
Some U.K. banks have operations in the U.S. In London, shares of
HSBC PLC (HSBA.LN) (HSBA.LN) rose 1.2%, Lloyds Banking Group PLC
(LLOY.LN) (LLOY.LN) moved up 1.1% and Royal Bank of Scotland Group
PLC (RBS.LN) (RBS.LN) picked up 1%. Barclays PLC (BCS) (BCS) ended
0.5% higher.
Read:Treasury yields extend rise as investors await Fed meeting
(Treasury%20yields%20extend%20rise%20as%20investors%20await%20Fed%20meeting)
Supermarkets: Supermarket stocks pushed higher after Kantar
Worldpanel said sales at British supermarkets rose 3.6% compared
with the year-earlier period.
Shares of J Sainsbury PLC (SBRY.LN) rose 2.6% even as the
grocer's market share in the 12 weeks to Sept. 10 fell by 0.2
percentage points, said Kantar. Shares of Wm. Morrison Supermarkets
PLC (MRW.LN) rose 2% and Tesco PLC (TSCO.LN) (TSCO.LN) tacked on
1%.
Kantar said the latest figures mark the sixth straight month
that sales have risen by more than 3%.
"We haven't seen sustained market growth of this kind since May
2013. A 1.5% increase in the volume of goods going through the
tills has contributed to this growth while the remainder of the
overall sales increase is down to higher prices," said Fraser
McKevitt, head of retail and consumer insight at Kantar Worldpanel,
in a statement.
But on the midcap FTSE 250 index , shares of Ocado Group PLC
(OCDO.LN) fell 2% as the online grocery delivery company said
average order size during the 13 weeks to Aug. 27 fell by 1.2%
compared with the year-ago period. Overall, Ocado's revenue rose
14% during the fiscal third quarter.
(http://www.marketwatch.com/story/ocado-revenue-rises-14-on-orders-growth-2017-09-19)
In other moves Tuesday, shares of International Consolidated
Airlines Group SA shares (IAG.LN)(IAG.LN) ended up 2.6% following a
Reuters report
(https://www.rte.ie/news/business/2017/0919/905849-iag-bid-for-air-berlin/)
that the parent of British Airways and Aer Lingus, is among the
bidders for insolvent Air Berlin.
(END) Dow Jones Newswires
September 19, 2017 12:02 ET (16:02 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Apr 2024 to May 2024
FTSE 100
Index Chart
From May 2023 to May 2024