U.K. stocks perked up on Wednesday, boosted by weakness for the British pound linked to political worries, and gains for heavily weighed shares such as Barclays PLC, which reported upbeat results.
How are markets performing?
The FTSE 100 UKX, +1.22% rose 1.1% to 7,034.95, the first gain in three sessions.
Sterling GBPUSD, -0.4314% meanwhile bought $1.2915, down from $1.2982 late Tuesday, touching its lowest level since early September, according to FactSet.
What drove the markets?
A weak pound was shielding London stocks somewhat from volatile market sentiment elsewhere, notably in the U.S. and China., which have been driving global markets.
The pound was lower amid mounting concerns U.K. Prime Minister Theresa May will face a no-confidence vote over her handling of Brexit negotiations. May will meet the so-called 1922 Committee, backbenchers on her own party who have been highly critical of her.
May has been fighting for her job as members of her own party have grown frustrated over Brexit efforts. Some, however, believe that the prime minister will find a way to emerge from this political turmoil and secure a Brexit pact.
Chinese stocks perked up, but U.S. equities appeared ready for a volatile day after futures swung around in premarket. China is a big user of natural resources, and negative news from that country can hurt the FTSE 100’s mining constituents, just as positive news can work the other way. The index is full of mining-related companies.
What are strategists saying?
“It appears that the currency has been spooked by Theresa May’s impending meeting with the 1922 Committee of Tory backbenchers, with whom the PM hardly has the best relationship with at the moment (even before the rather violent comments reported in the papers over the weekend). The outcome of that address may impact how the Brexit negotiations move forward – or don’t, as the troublesome case may be,” wrote Connor Campbell, financial analyst at SpreadEx.
Stocks in focus
Earnings news lifted shares of Barclays PLC BARC, +3.19% BARC, +3.19% by over 3%, as the bank beat forecasts, and says targets for the next two years are on track.
BP PLC BP, -1.95% BP., +1.95% shot up 2%, while Royal Dutch Shell Group PLC RDS.A, -2.76% RDSA, +1.03% rose 1% as oil prices inched up after a major pullback on Tuesday.
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