LONDON (Reuters) - British shares rose on Tuesday, boosted by a weak sterling and a surge in services company DCC (DCC.L), while UK mid caps posted a record closing level.
Sterling fell to its lowest in two weeks against the dollar, contributing to gains for Britain's blue-chip FTSE index .FTSE which has many dollar-earning constituents.
The FTSE 100 ended the session 0.2 percent higher at 7,186.22 points while the British mid cap index .FTMC closed 1 percent higher at a record closing level of 18,559.70 points.
DCC was the top performer among the blue chips, rising after the company said it would buy a retail petrol station network of ExxonMobil’s (XOM.N) Norwegian unit, Esso Norge AS, for 2.43 billion Norwegian crowns ($293.38 million).
Shares in the Ireland-based company were up 5.6 percent and marked their biggest one-day gain since Nov. 2015.
Oil major BP (BP.L) suffered after the company said its 2016 profit slumped to the lowest level in at least a decade, to $2.59 billion. BP shares were down more than 4 percent, the worst-performing FTSE stock. The FTSE 350 oil & gas index .FTNMX0530 dropped more than 2 percent.
Engine maker Rolls Royce (RR.L), however, was a top gainer, up almost 3 percent. The stock featured in Citigroup’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, helped by a weaker pound due to their operations abroad. Precious metals miners Fresnillo (FRES.L) and Randgold Resources RRS.L were the biggest gainers, both up more than 4 percent.
Education group Pearson (PSON.L), which suffered its worst-ever daily fall on Jan. 18, was also a top gainer, up 3.6 percent after Morgan Stanley raised its target price on the stock to 615p from 550p.
Among the mid caps, which outperformed their blue chip peers, workwear and hygiene company Berendsen BRSN.L rose almost 7 percent after RBC analysts upgraded the stock to “outperform” from “sector perform”, saying the European business was in good shape.
The small-cap index .FTSC was up 0.4 percent, also hitting a record high and closing at 5,294.21 points, its highest closing level on record.
Reporting by Kit Rees and Helen Reid; Editing by Catherine Evans