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* FTSE 100 up 0.5 percent
* Services company DCC top of blue-chip index
* Housebuilders bounce back as government report expected
* BP flounders after profit slumps
By Helen Reid
LONDON, Feb 7 British shares rose on Tuesday,
boosted by a weak sterling and housebuilders stocks, while
services company DCC surged on news of a purchase from
Sterling fell to its lowest in two weeks against the dollar,
contributing to gains for Britain's blue-chip FTSE index
which has many dollar-earning constituents. The FTSE was up 0.6
percent at 0955 GMT.
DCC rose to the top of the FTSE after the company said it
would buy a retail petrol station network of ExxonMobil's
Norwegian unit, Esso Norge AS, for 2.43 billion
Norwegian crowns ($293.38 million).
Shares in the Ireland-based company were up 6.7 percent and
headed for their biggest one-day gain since Nov. 2015.
Oil major BP suffered after the company reported 2016
profit slumped to the lowest level in at least a decade, to
$2.59 billion. BP shares were down 2.8 percent, the
worst-performing FTSE stock. The FTSE 350 oil & gas index
was the only sector index in negative territory.
Engine maker Rolls Royce was a top gainer, up 2.8
percent. The stock figured in Citi bank's 'top calls' for the
day. "Results next week should mark the inflection from
fire-fighting to looking to the future," Citi analysts wrote in
Materials stocks were the top sectoral gainer. Rio Tinto
, which reports earnings on Feb. 8, was a top gainer
along with peers Fresnillo and Randgold Resources
. The FTSE miners benefit from a weaker pound due to
their operations abroad.
Education group Pearson, which suffered its
worst-ever daily fall on Jan. 18, was a top gainer, up 2.8
percent after Morgan Stanley raised its target price on the
stock to 615p from 550p.
Housebuilders Taylor Wimpey, Barratt Development
and Persimmon were gaining ground, up between
2.2 and 3.4 percent, after closing in negative territory
The government was expected to publish details of a new
housing strategy on Tuesday.
The mid-cap FTSE 250 index outperformed the
blue-chip index, up 0.8 percent with workwear and hygiene
company Berendsen leading the gains, up 5.4 percent
after RBC analysts upgraded the stock to "outperform" from
"sector perform", saying the European business was in good
The small-cap index was up 0.2 percent,
underperforming its peers as energy stocks weighed.
Premier Oil was the top faller, down 5.9 percent
after a downgrade from "buy" to "hold" from Deutsche Bank
analysts, citing underperformance from the company's Solan field
in the North Sea.
(Reporting by Helen Reid; Editing by Raissa Kasolowsky)