LONDON (Reuters) - Britain’s top share index hit a four-month high on Tuesday as oil majors rallied, though Vodafone’s shares struggled after the world’s second largest mobile operator said its boss was leaving.
The FTSE blue-chip benchmark ended the day up 0.2 percent, while Vodafone’s shares fell 4.3 percent, the worst-performing on the index.
Vodafone, which also announced its full-year results, said CEO Vittorio Colao, who spent 10 years reshaping the group into a digital communications powerhouse, would be replaced by its current finance director.
“With positive results across the board, one would expect markets to react by buying the shares, and yet investors are clearly taking a dimmer view about the company’s prospects with the CEO of 10 years on his way out,” said Accendo Markets analyst Artjom Hatsaturjants.
“After 10 years of stability under Colao, Vodafone is potentially setting sail into uncharted waters,” Hatsaturjants added.
A strong performance by the heavyweight energy sector boosted the index, however, with shares in BP and Royal Dutch Shell both up more than 1 percent and tracking oil prices higher.
The price of Brent crude touched a fresh multi-year high, though gave up some gains, boosted by worries that U.S. sanctions on Iran that are likely to restrict crude oil exports from one of the biggest producers in the Middle East. [O/R]
“We still favour energy stocks, with higher oil prices aiding the sector,” analysts at Credit Suisse Wealth Management wrote in a note earlier in the day, adding that they were also constructive on UK stocks.
“(The UK stock market) will profit from its relatively higher energy sector exposure, and the slower GBP appreciation will also reduce the potential headwinds for earnings growth here,” said Credit Suisse Wealth Management analysts.
In earnings, updates from Easyjet and Taylor Wimpey prompted steep rises in the shares of the British low-cost airline and housebuilder, up 3.3 percent and 3.7 percent respectively.
EasyJet reported strong first-half results and said it would expand its holiday business while Taylor Wimpey raised its ordinary dividend and said it would pay a special pay-out of 350 million pounds in 2019.
Shares in Land Securities fell nearly 2 percent as Britain’s largest listed property developer posted a slight fall in full-year adjusted net asset value per share.
The British banking sector also posted gains mirroring lenders across Europe after strong results from Austria’s Raiffeisen Bank and quarterly pre-tax profit ahead of analysts’ expectations from Commerzbank
There were losses however for Britain’s CYBG, down 5.6 percent after it reported a loss of 76 million pounds for the first half of the year on Tuesday and gave no update on its bid for Virgin Money. The latter fell 2.8 percent.
Reporting by Julien Ponthus and Kit Rees; Editing by Richard Balmforth