By Carla Mozee, MarketWatch
U.K. stocks rose Wednesday, with the pound climbing alongside on
strong services-sector data, coming a day before Britons head to
the polls for the country's general election.
The FTSE 100 was up 0.2% at 6,941.71. It had been darteing in
and out of positive territory alongside the broader European equity
market
(http://www.marketwatch.com/story/european-stocks-volatile-as-bond-yields-spike-euro-rises-2015-05-06)
, as investors assess a recent climb in both bond yields and the
euro.
On the currency market, sterling (GBPUSD) rose to $1.5198 after
data firm Markit said its purchasing managers' index for U.K.
services activity hit an eight-month high, at 59.5. That
outstripped the forecast of 58.5 from a FactSet survey of analysts.
The pound late Tuesday was at $1.5184.
The services reading was the last piece of data to roll out
before the general election. Polling suggests neither the
Conservative Party, known as the Tories, nor the Labour Party will
win the 326 seats needed for a majority.
"Now we just have to wait and see how the vote pans out and what
coalition government will rule," said Craig Erlam, senior market
analyst at Oanda, wrote Wednesday. "At this stage, it seems that
while the Tories may win the most seats, the biggest majority that
exists is an anti-Tory one, which could mean Conservatives have
more seats but [Labour leader] Ed Miliband becomes Prime
Minister."
The FTSE 250 was off 0.1% at 17,443.87. Constituents on that
mid-cap index are seen as having greater exposure to the British
economy than those on the blue-chip FTSE 100.
Read: Pound could drop to $1.39 on U.K. election uncertainty,
says Morgan Stanley
(http://www.marketwatch.com/story/pound-could-drop-to-139-on-uk-election-uncertainty-says-morgan-stanley-2015-05-05)
Movers: Imperial Tobacco shares picked up 2.4% as the company,
whose brands include Davidoff and JPS, said first-half net profit
jumped to 853 million pounds
(http://www.marketwatch.com/story/imperial-tobacco-profit-rises-3-2015-05-06).
It also said it expects its $7.1 billion deal to buy a number of
cigarette brands from Reynolds American Inc. and Lorillard Inc. to
receive regulatory approval within the next several weeks.
J Sainsbury PLC shares lost grip of initial gains and moved 3.6%
lower. The company said full-year underlying profit, which excludes
one-time items and pension expenses, fell 15% to GBP681 million
(http://www.marketwatch.com/story/j-sainsbury-posts-first-profit-drop-in-a-decade-2015-05-06).
The figure was above Reuters forecasts for GBP659 million.
The full-year drop in underlying profit, the first for
Sainsbury's in a decade, comes as an intense price war is being
fought by Britain's largest grocers. They are coming under pressure
from low-cost supermarkets such as Aldi and Lidl, which said
Wednesday they had increased market share
(http://www.marketwatch.com/story/aldi-lidl-add-uk-market-share-sales-hit-record-2015-05-06)
and sales.
Shares of supermarket chain Tesco PLC fell 0.8%, and Wm Morrison
Supermarkets PLC gave up 0.3%.
Meanwhile, Sage Group PLC topped the FTSE 100, rising 6% after
the business software and services firm backed its 2015 forecast
(http://www.marketwatch.com/story/sage-profit-revenue-rise-reaffirms-2015-guidance-2015-05-06)and
posted a rise in half-year profit.
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