LONDON (Reuters) - Britain’s major share index climbed to a new six-week high on Tuesday as strong gains from oil majors and banks after a drop in sterling helped offset disappointing results from hotelier IHG and gambling company Paddy Power Betfair.
The FTSE 100 .FTSE gained 0.1 percent, helped to its highest in six weeks after sterling hit a 10-month low against the euro.
The weaker sterling helped dissipate a drag from miners as metal prices dropped after trade data from China, the world’s top copper consumer, fell short of expectations.
Payments services provider Worldpay WPG.L also lifted the index, up 1.7 percent as investors anticipated the details of its deal with Vantiv to be announced on Wednesday.
Worldpay shares are up 20 percent since news of the deal, the latest in a series of mergers and acquisitions in the payments sector.
Earnings from the FTSE’s international exporting companies have been flattered by the weaker pound, investors said, warning this support would dissipate in the second half.
“We are still benefiting from the annualisation of the Brexit effect on the currency, but it will be interesting to see how the second half will go when results are more based on actual top-line growth,” said Laura Foll, UK fund manager at Janus Henderson.
Intercontinental Hotel and Paddy Power Betfair were the worst-performing after disappointing results, helping the pan-European travel and leisure sector .SXTP fall 0.6 percent.
Paddy Power Betfair PPB.I shares fell 4.1 percent, hitting their lowest in nearly two years and taking two-day losses to 9 percent of market value.
First-half results added to investor concerns after Monday’s news CEO Breon Corcoran would step down. The company said successor Peter Jackson would be in place in six to 12 months.
“Paddy Power Betfair delivered an earnings miss due to net revenue margins coming in below our expectations once again,” said analysts at Davy Research.
IHG (IHG.L) fell 4 percent after reporting growth in revenue per room slowed in the second quarter, hurt by a later Easter, though Liberum analysts also pointed to the company launching a new U.S. midscale brand.
“Further evidence of an accelerating pipeline is encouraging, offsetting some of our concerns about Rev/PAR (revenue per available room) slowdown, although not all,” they said.
Sharp results-driven losses weighed on the mid-cap index .FTMC which fell 0.2 percent.
Shares in serviced office provider IWG (IWG.L) fell 12 percent, their worst day since the Brexit aftermath, as second-quarter results disappointed. Profitability was hurt by investment into an accelerating expansion, analysts said.
A cut to sell from Credit Suisse sent motor insurer AA (AAAA.L) down 7.4 percent.
“We downgrade to Underperform and reduce the target price to 175p from 235p to reflect operational challenges which, we believe, will continue to face the Roadside Assistance division in the near-to-medium term,” wrote analysts.
Meanwhile veterinary and pet grooming firm Pets at Home (PETSP.L) jumped 5.7 percent as strong demand boosted its first-quarter revenue.
Reporting by Helen Reid; Editing by Alison Williams