UKX FTSE 100 Index

By Carla Mozee, MarketWatch

London benchmark now headed for weekly win

U.K. stocks on Friday marched higher, courtesy of the pound's fall against the dollar, putting the benchmark FTSE 100 on track for a weekly rise.

Sterling's loss of strength came after the U.S. Senate narrowly approved a Republican budget resolution (http://www.marketwatch.com/story/senate-republicans-approve-budget-proposal-clearing-path-to-tax-overhaul-2017-10-19). The 51-49 vote paves the way for tax reforms that could lead to $1.5 trillion in U.S. tax cuts, analysts said.

What stocks are doing: The FTSE 100 index picked up 0.4% to 7,552.78 and briefly popped above the record close of 7,556.24 made last week. All sectors gained, except for the consumer goods group.

Before trading opened, the London benchmark was on course for its first weekly fall in five weeks. It's now poised for a modest gain of 0.1%.

What strategists are saying: "This would represent the first major reform from President Trump's administration following several stumbles, seen as supportive of U.S. growth, Fed rate hikes and, of course, equity markets," said analysts at Accendo Markets, speaking about the U.S. budget vote.

Read:Dow, S&P shape up for more records after Senate clears big hurdle to tax reform (http://www.marketwatch.com/story/dow-sp-shape-up-for-more-records-after-senate-clears-big-hurdle-to-tax-reform-2017-10-20)

Exporters boosted: Among multinationals, shares of security services company G4S PLC (GFS.LN) rose 1.5%. Those of pest control services provider Rentokil Initial PLC (RTO.LN) picked up 1.2%, as did shares of building materials supplier CRH PLC .

Weakness in the pound can help pull up shares of multinational companies. It can provide a currency-related boost to earnings, once the companies translate their profit into sterling.

The pound traded at $1.3122, down from $1.3159 late Thursday in New York. It was slightly higher against the euro, yen and other currencies.

Stock movers: InterContinental Hotels Group PLC (IHG) fell 0.9% after a financial update. The operator of the Crown Plaza and Holiday Inn chains said it's confident in its outlook for the rest of 2017 (http://www.marketwatch.com/story/intercontinental-hotels-backs-view-as-sales-rise-2017-10-20), as it reported an increase in room revenue.

Bank of England watch:BOE's Deputy Governor Jon Cunliffe (https://www.bloomberg.com/news/articles/2017-10-19/boe-s-cunliffe-says-timing-of-rate-hike-is-an-open-question-j8yrzrb8) struck a cautious tone about the potential for a U.K. interest-rate hike next month in an interview with the BBC late Thursday. He said it was an "open question" when to begin slow and gradual increases.

Read:Brexit is far from the only worry for U.K. stocks (http://www.marketwatch.com/story/brexit-is-far-from-the-only-worry-for-uk-stocks-2017-10-14)

The stream of economic data this week has been closely watched for prompts for the BOE as it assess its next move on interest rates. The bank's monetary policy makers are largely expected to raise the benchmark rate from its record low of 0.25% at a meeting in November.

Retail sales fell 0.8% in September (http://www.marketwatch.com/story/uk-retail-sales-disappoint-with-drop-of-08-2017-10-19) from the previous month, inflation-adjusted pay fell for the sixth time in a row (http://www.marketwatch.com/story/uk-real-wages-fall-for-6th-month-in-a-row-2017-10-18) in August, and consumer price inflation hit 3% (http://www.marketwatch.com/story/uk-inflation-hits-3-highest-rate-since-2012-2017-10-17), a percentage point above the BOE target.

(END) Dow Jones Newswires

October 20, 2017 04:29 ET (08:29 GMT)

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