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Britain's FTSE rises, boosted by weak sterling, housebuilders
February 7, 2017 / 10:20 AM / 10 months ago

Britain's FTSE rises, boosted by weak sterling, housebuilders

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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 (Reuters) - British shares rose on Tuesday, boosted by a weak sterling and housebuilders stocks, while services company DCC surged on news of a purchase from ExxonMobil.

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 a note.

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 yesterday.

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 shape.

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)

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