LONDON (Reuters) - British shares edged higher on Friday and held to their highest level in two months as political uncertainties linked to Theresa’s May’s premiership pushed the pound lower, giving a boost to dollar-earning groups such as pharma stocks.
The FTSE 100 index .FTSE closed 0.2 percent up at 7,522.87 points, with Britain's pound on track for its worst week in a year as the Prime Minister hit back at a plot to topple her, saying she would provide "calm leadership" to the country.
“The talk of a leadership plot against the Prime Minister is eroding the pound’s value and propping up the FTSE 100,” CMC Markets analyst David Madden wrote in a note to clients.
Last month sterling strength helped the FTSE 100 to post a slight decline for September, but the currency has since been losing steam and the index has posted its biggest one-week gain since December last year.
Health stocks, which source a sizeable chunk of their revenue from the United States, were among the biggest gainers. Heavyweights GlaxoSmithKline (GSK.L) and AstraZeneca (AZN.L) rose by about 0.3 percent and 1 percent respectively.
Shares in budget airline easyJet (EZJ.L) dropped by 1.6 percent, the biggest FTSE 100 faller, after a price target cut from broker Credit Suisse.
The airline also posted a mixed pre-close update, with analysts pointing to pricing pressures despite easyJet reporting a record summer and saying that it expects to reach the higher end of its profit range.
“Revenue trends are improving, but pricing remains under pressure,” Liberum analysts said in a note.
Credit Suisse analysts saw some supportive factors, however.
“With Monarch’s failure, Air Berlin’s break-up, Alitalia’s administration and Ryanair capacity cuts, we expect this confluence of positives must help EZJ (easyJet) pricing,” they said in a note.
Shares in building materials company CRH (CRH.L) fell by 1.3 percent after its offer for U.S. Ash Grove Cement Co ASHG.PK was surpassed.
Reporting by Kit Rees and Julien Ponthus; Editing by Keith Weir and David Goodman