February 4, 2019 / 9:19 AM / 10 months ago

FTSE 100 at near-three-month high, BP shines on strong 2018

(Reuters) - British blue-chip shares surged to their highest in nearly three months on Tuesday as heavyweight BP doubled its annual profit and miners rallied on higher iron ore prices while a weaker pound was also supportive.

FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville

London’s main index added 2 percent, extending its winning streak to six days to hit levels not seen since Nov. 12. The midcap index also touched its highest since November with a 0.8 percent rise.

Oil major BP jumped 5.2 percent on its best day in nearly three years as its full-year numbers topped expectations and helped it join competitors in posting a strong 2018.

Mining stocks hit their highest since June after Brazil ordered top producer Vale to shut its tailings dams following a deadly incident at one of its sites last week, raising concerns about falling output.

Export-focused blue chips including British American Tobacco, GlaxoSmithKline and AstraZeneca rose on the weaker pound.

Sterling hit two-week lows after a survey showed firms in Britain’s dominant services sector reported job cuts for the first time in six years, while uncertainty grew about the progress of Brexit negotiations as nothing significant emerged from a visit to Northern Ireland by Prime Minister Theresa May.

May, seeking a solution to the Irish border issue that is at the centre of her Brexit headaches, will meet European Council President Donald Tusk on Thursday in an attempt to get changes to her deal.

Online retailer Ocado, among last year’s best performing stocks, reversed early losses to end 4.2 percent higher after results that showed investments hit earnings.

Mid-cap drugmaker Indivior slumped 9 percent after losing the latest round of a U.S. court battle to delay the launch of generic competitors to its blockbuster drug Suboxone.

Retail stocks were in favour as a survey showing British consumers picked up the pace of their shopping in January offered some respite to a sector that suffered its worst Christmas in a decade. Marks & Spencer rose 2 percent.

“We have been mercifully free of any Brexit discussion so far but the clock is ticking on that... I am not sure they see either side giving way which would make life a lot more difficult in the near term,” Chris Beauchamp, analyst at IG, said of the FTSE’s recent performance.

If May fails to get parliament’s approval for a revised Brexit deal on Feb. 13, lawmakers will vote on next steps on Feb. 14.

Reporting by Muvija M and Shashwat Awasthi in Bengaluru; editing by Josephine Mason and John Stonestreet

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