LONDON MARKETS: FTSE 100 Fights For Firm Direction As Inflation Hits Highest In Almost 6 Years
December 12 2017 - 04:03AM
Dow Jones News
By Carla Mozee, MarketWatch
Oil producer shares rise on pipeline leak, but supermarkets pull
back
U.K. blue-chip stocks on Tuesday struggled around two-week
highs, as shares of oil producers were pulled higher by a rise in
crude prices, but some supermarket shares were dragged down by new
industry sales figures.
All the moves come ahead of the release of British consumer
price data for November, due later in the session. The inflation
reading is key to policy decisions by the Bank of England, which
will send out an update on its interest rate stance on
Thursday.
How markets are moving: The FTSE 100 index was up 0.1% at
7,458.75 but has been dipping into negative territory. Oil and gas,
tech and utility shares rose, but the consumer services, financial
and basic materials groups declined.
On Monday, the London benchmark rose 0.8%
(http://www.marketwatch.com/story/ftse-100-leads-the-way-in-europe-driven-higher-by-softer-pound-2017-12-11)
to close at its highest level since Nov. 28, according to FactSet
data.
The pound bought $1.3362, up from $1.3339 on late Monday in New
York. handle. Strength in sterling typically weighs on exporters
listed on the FTSE 100, as it hurts the value of overseas
revenue.
In fixed-income markets, the 10-year gilt yield was up 1 basis
points to 1.216%, according to Tradeweb. Yields rise when prices
fall.
What's moving markets: Shares of oil producers rose as crude and
Brent futures extended the gains they logged on Monday, after news
that a major North Sea oil pipeline, The Forties, will be shut down
for weeks to repair a leak.
While the outage is a significant supply disruption -- the
pipeline carries supplies from more than 80 major fields -- it has
a wider impact in that the Forties's flows feed into a key price
benchmark for global oil.
On Tuesday, February Brent crude jumped more than 1%
(http://www.marketwatch.com/story/brent-oil-rises-to-fresh-212-year-high-as-north-sea-pipeline-outage-reverberates-2017-12-12)
to trade around its highest level since mid-2015. Later, a weekly
update on U.S. oil stockpiles will be released by the American
Petroleum Institute after the close of European trade.
Meanwhile, the pound was rising again on Tuesday. Strength in
sterling typically weighs on exporters listed on the FTSE 100, as
it hurts the value of overseas revenue.
Oil movers: Shares of BP PLC (BP.LN) (BP.LN) climbed 1.1%, and
Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) was up 0.9% as oil prices
were carried higher.
Inflation data: U.K. inflation has hit its highest level since
March 2012, boosted by higher air fares, the Office for National
Statistics reported. The consumer price index grew 3.1% in the 12
months to November. Analysts had expected the CPI to hold at 3%,
according to a FactSet survey.
The inflation reading is more than a full percentage point above
the Bank of England's target. The U.K. central bank will release
its next policy decision on Thursday, but no changes are expected.
Policy makers led by Mark Carney in November raised the benchmark
interest rate for the first time in a decade, by a quarter
percentage point to 0.5%.
Supermarket sweep: Kantar Worldpanel said Tuesday that sales for
the top four U.K. grocers grew in the 12 weeks ended December, but
each lost market share
(http://www.marketwatch.com/story/top-4-uk-supermarkets-lift-sales-but-lose-share-2017-12-12).
Wm Morrison Supermarkets (MRW.LN) fell 2.6% and J Sainsbury
(SBRY.LN) was down 2.3% while rival Tesco PLC (TSCO.LN) was up
0.1%.
Stock movers: Ashtead PLC (AHT.LN) surged 3.5% as the
equipment-rental company said it will start a share buyback program
of up to GBP1 billion
(http://www.marketwatch.com/story/ashtead-to-buy-back-up-to-1-billion-in-shares-2017-12-12)
($1.33 billion) and that fiscal 2018 results should come in above
expectations.
(END) Dow Jones Newswires
December 12, 2017 04:48 ET (09:48 GMT)
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