U.K. stocks on Wednesday were headed for a fifth session of gains, as miners got a lift from upbeat Chinese data and traders assessed the latest batch of corporate earnings. Shares of Paddy Power Betfair slid, the biggest decliners in London, after the bookmaker said new taxes hit profit. The pound edged higher after U.K. construction activity bounced up from a sharp fall the previous month to reach its highest level since November 2017. The U.K.’s FTSE 100 index added 0.6% to 7,564.49. On Tuesday, the London benchmark closed 0.2% higher for its fourth rise in a row, bolstered by a softening in the pound and as earnings reports cheered investors. The pound was slightly higher at $1.3642, compared with $1.3620 before the construction data and with $1.3612 late Tuesday in New York. Mining stocks were advancing, as metals prices gained on data showing a rise in activity in China’s factories. Copper prices were up 1.4% on the Caixin report. China is a big buyer of industrial and precious metals.
Corporate earnings were once again in focus, having helped cheer investors and drive the London benchmark to log a run of gains. While the pound was edging higher, it was still lingering below $1.37, having dropped below that level for the first time since mid-January on Tuesday. Weakness in sterling typically helps lift the FTSE 100 toward gains, as the blue-chip index is home to many multinational companies, which generate most of their sales in foreign currencies. Construction activity in the U.K. recovered moderately in April, after weather-related disruptions in March that pushed the rate to a 20-month low. The purchasing managers’ index came in a 52.5 in April, compared with 50.5 expected and with the slump to 47.0 in March as “Beast from the East” wintry conditions hit activity. A reading above 50 signals expansion. “Residential work was by far the best performing category of construction activity in April, with the rate of growth reaching its strongest since May 2017,” Markit/CIPS said in its release. Leading mining stocks on the rise,Fresnillo
PLC added 2.7%, while Glencore was up 2.8% and Antofagasta PLC moved 2.4% higher. Sage Group shares were up 3.4% after the accountancy software maker released an earnings update. Sage said is has addressed issues that led to slower-than-expected sales, which dragged pretaxprofit lower in the first half. On the downside, Paddy Power Betfair PLC’s stock fell 6.3% after the bookmaker posted a drop in first-quarter profit and revenue, hit by new betting taxes.Shares of Direct Line Insurance Group PLC dropped
3.6% after the company said freezing conditions at the start of the year is expected to result in claims that will eat up all of its yearly weather budget. Off the main index, shares in Inmarsat gained 9.6% after the British satellite telecommunications company said pretaxprofit in the first quarter surged versus the year-earlier period.
DOWNLOAD FULL DOCUMENT