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FTSE stages small recovery as strong dollar boosts consumer goods

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By Reuters
FTSE stages small recovery as strong dollar boosts consumer goods
City workers make phone calls outside the London Stock Exchange in Paternoster Square in the City of London, Britain, October 1, 2008. REUTERS/Toby Melville/File Photo   -   Copyright  Toby Melville(Reuters)

By Josephine Mason

LONDON (Reuters) – UK shares were slightly higher on Wednesday, recovering from seven-month lows hit the previous day as a stronger U.S. dollar boosted consumer good giants and luxury goods company Burberry garnered support from upbeat results from Kering <PRTP.PA>.

The FTSE 100 <.FTSE> was up 0.2 percent by 0901 GMT, snapping two days of losses but failing to clear the pyschologically important 7,000 mark.

The mid-cap FTSE 250 was up 0.2 percent after hitting its lowest levels since February 2017 on Tuesday.

Asian stocks turned higher as fresh signs of stimulus from China propped up sentiment despite Wall Street’s overnight losses, while crude oil approached two-month lows after Saudi Arabia flagged possible supply increases.

“The various macro-problems affecting the banking, mining and oil sectors are going to make it difficult for the FTSE to do any better, unless there is a stronger shift in sentiment across the board,” said Spreadex analyst Connor Campbell.

Among the biggest gainers on the FTSE 100 were big multinationals with less exposure to the pound <GBP=> Diageo <DGE.L> and Reckitt Benckiser <RB.L>, up 1.05 and 2.3 percent respectively.

The pound eased to three-week lows ahead of British Prime Minister Theresa May’s address to restive Conservative Party lawmakers on her Brexit strategy later in the day.

The FTSE 100, which is on track for its worst monthly performance since 2012, derives 70 percent of its profits from overseas.

Luxury goods maker Burberry <BRBY.L>, up 0.8 percent, was supported by a positive third-quarter report and rosy outlook on China, the world’s second-largest economy, from French luxury goods company and owner of the Gucci brand Kering <PRTP.PA>.

Among the other earnings, banks were in focus after broadly confident outlooks from Deutsche Bank <DBKGn.DE> and Barclays Bank <BARC.L>. Barclays shares were up 0.6 percent.

But competition in the UK mortgage market hit Metro Bank[MTBAK.UL], which sank 7.2 percent to the bottom of the midcap index and set for its biggest one-day drop in more than two years.

Stobart Group <STOB.L> fell 5.3 percent after its interim earnings report.

(Reporting by Josephine Mason; Editing by Richard Balmforth)