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Prudential's record profit helps Britain's FTSE creep higher
March 14, 2017 / 10:22 AM / 9 months ago

Prudential's record profit helps Britain's FTSE creep higher

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* FTSE 100 up 0.2 pct

* Sterling at 8-week low supports index

* Ocado rises after healthy results

* Record profit boosts Prudential to top of FTSE

* SIG jumps on dividend cut, reshuffle

By Helen Reid

LONDON, March 14 (Reuters) - British shares were up slightly on Tuesday after some solid earnings reports, which offset falls in banking and retail stocks on political uncertainty as Britain gets set to start negotiating its departure from the EU.

Prudential was the top FTSE gainer, its shares rising 2.9 percent to a two-year high after the insurer reported a record profit for 2016, spurred by growth in its Asian business.

It led Britain’s FTSE 100 index up 0.2 percent to 7,379.07.

A weak pound also supported some companies that derive earnings from overseas, as sterling hit an eight-week low against the dollar.

“The FTSE 100 opened upbeat as the pound sold off aggressively against the U.S. dollar and the euro,” said Ipek Ozkardeskaya at LCG.

Sterling’s decline, however, was a reflection of jitters about an imminent triggering of Brexit negotiations and Scotland’s call on Monday for a second independence referendum. Britain’s parliament approved legislation on Monday to allow the country to begin divorce talks with the European Union.

The uncertainty prompted selling of big retail and banking stocks, which have been particularly sensitive to political developments.

Retailers Marks & Spencer and Next, were down 2.2 and 1.1 percent respectively.

Banks Standard Chartered, Lloyds and RBS were also down 1.2 to 1.9 percent, and the banking index was among the worst-performing sectors.

The more domestically focused mid-caps index hit a fresh record high in early trading, before paring back to trade flat.

Online supermarket Ocado was among top mid-cap gainers, up 2.5 percent after it said it maintained sales growth in its first quarter, though it highlighted signs of pricing pressures in the market.

Ocado, which has kept investors waiting for a planned overseas deal, said it was “as confident as ever” it would secure one.

“Profits remain unlikely to suddenly improve, without the much-hyped international deal,” said Neil Wilson of ETX Capital.

“If Ocado lacks the muscle to expand on its own, it could become a takeover target itself, especially given the current climate.”

Building materials supplier SIG was the top mid-cap gainer, surging 9.1 percent after it named a new CEO and said it planned to sell assets and review costs as it battles to recover from weak trading.

The firm’s shares plummeted 22 percent in November when it warned on profit, blaming weak demand and delays to projects after Britain’s Brexit vote. (Reporting by Helen Reid; Editing by Susan Fenton)

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