LONDON MARKETS: FTSE 100 Drives Higher As Burberry, Oil Stocks Climb

U.K. unemployment rate at lowest in 42 years

The U.K.’s benchmark FTSE 100 was propelled higher Wednesday as oil shares advanced and Burberry Group PLC jumped following the luxury-retailer’s financial update.

The London benchmark pushed up 0.8% to 7,388.20, and crossed above 7,400 for the first time June 29, FactSet data show. Only the tech and consumer-services groups moved lower.

Oil and gas shares, which have a weighting of about 14% on the FTSE 100, gained ground as oil prices climbed more than 1% ( That rise came ahead of a weekly supply report from the U.S. Energy Information Administration that could show a drawdown in stockpiles.

Shares of BP PLC (BP.LN) (BP.LN) picked up 1.8% and Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) moved up 1.5%.

Read:Buying these commodity stocks looks like a home run (

Sterling: London blue-chip shares remained higher even as the pound came off session lows following the U.K. government’s latest jobs report ( A stronger pound can hurt shares of multinationals on the FTSE 100 as those companies make the bulk of their revenue and earnings in overseas markets.

But among so-called dollar earners, InterContinental Hotels Group PLC (IHG) , whose brands include Holiday Inn, was up 1.2%, and equipment rental company Ashtead Group PLC (AHT.LN) gained 1%.

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The pound hit an intraday high of $1.2887 after the jobs report. It fetched $1.2845 late Tuesday in New York.

Sterling is “looking perkier than it has done in recent days, as the market chooses the hard economic data over an interview with BOE Deputy Governor Ben Broadbent, who said he is not ready to hike rates yet,” said Kathleen Brooks, City Index’s research director, wrote.

See:U.K. sovereign rating at risk of downgrade if Brexit talks go badly (

Stock movers: Burberry Group PLC shares (BRBY.LN) climbed 2.2% after the high-end apparel and accessories maker said it’s on track to reach its cost savings targets and that first-quarter comparable sales and underlying revenue climbed ( Retail revenue on an underlying basis rose 3% to GBP478 million.

Barratt Developments PLC (BDEV.LN) shares turned lower by 0.1%. They had been up by as much as 2.2% after the home builder said fiscal 2017 pretax profit is expected to rise to a more-than-expected GBP765 million ( as it sold more expensive homes.

Micro Focus International PLC (MCRO.LN) slid 7.9%. “Despite cost reductions in Micro Focus which enabled margins to remains at c.50%, absolute profits were modestly below our expectations due to sales weakness,” said Investec in a research note about the software company’s financial update (

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Kingfisher PLC (KGF.LN) fell 2.7%. UBS downgraded its rating on the DIY retailer to sell from hold, as well as its price target, according to Dow Jones Newswires.

Jobs: The unemployment rate fell to 4.5% in the March-May period, the lowest since 1975. Weekly wages excluding bonuses rose by a more-than-expected 2%, but wages adjusted for inflation declined.

“We doubt that this month’s wage increase will be enough for the majority of Monetary Policy Committee members to hike rates on 3rd August, the next BOE meeting,” wrote Brooks.

The pound hit an intraday low of $1.2811 the Bank of England’s Broadbent said uncertainties surrounding the outlook for the British economy makes it a difficult time to support an increase in borrowing rates.

“In my opinion, it is a bit tricky at the moment to make a decision (to raise rates),” Broadbent told Scotland’s The Press and Journal newspaper in an interview published Wednesday ( “I am not ready to do it yet.”

The pound traded around eight-month lows against the euro .

Also on the central bank radar Wednesday, Federal Reserve Chairwoman Janet Yellen will begin two days of testimony before lawmakers on Capitol Hill.

Watch MarketWatch’s live blog and video of Yellen’s testimony before House panel (

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(END) Dow Jones Newswires

July 12, 2017 08:45 ET (12:45 GMT)

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