LONDON (Reuters) - The UK’s top share index advanced on Friday and posted its third week of gains as shares in consumer giant Reckitt Benckiser jumped after results and an easing of trade tensions soothed the broader market.
The blue chip FTSE 100 .FTSE index was up 0.5 percent at 7,701.31 points at its close, joining in a rise across the broader European equity market.
Heavyweight consumer staples stock Reckitt Benckiser (RB.L) was the biggest single contributor to gains as its shares jumped more than seven percent. It marked its best day since November 2008 after second quarter like-for-like sales beat estimates, helped by better-than-expected growth in its infant and child nutrition business.
Reckitt also hiked its annual revenue growth target.
“Today’s results suggest to us a recovery is well under way,” Ameet Patel, senior analyst for Northern Trust Capital Markets, said.
“While many European ‘quality’ stocks are trading at eye-watering valuations, this is one that investors can still buy at a compelling valuation – we think today signals a return to form which could drive a sustained re-rating,” Patel added.
Shares in BT (BT.L) also rose five percent after the telecom group beat earnings expectations, though Rightmove (RMV.L) declined more than three percent after the company gave a half-year earnings update.
Elsewhere a rise across energy stocks and financials kept the market buoyant. The FTSE extended the previous session’s gains when European markets rallied following a surprise deal between the United States and the European Union to suspend the imposition of any new U.S. tariffs on the bloc.
This reduced the risk of a trade war, which has weighed on markets globally this summer.
The FTSE itself has traded in a narrow range since June, reflecting a lacklustre sterling as worries over the progress of Brexit negotiations continue to shackle the currency.
“If you look at the way the UK stocks market performs, a lot of it is determined by moves in sterling,” said Stephen Macklow-Smith, head of Europe equity strategy at JPMorgan Asset Management. The pound has been remarkably unvolatile relative to the euro over the past 12 months or so, he added.
“We’re waiting for clarity, and if, as appears likely from what the prime minister said, we’re heading towards a softer Brexit, then that should bring some relief to the UK domestic economy and some strength in sterling,” Macklow-Smith said.
Reporting by Kit Rees; Editing by Jon Boyle and Stephen Powell