By Carla Mozee, MarketWatch
U.K. stocks stepped higher Tuesday, eyeing their first win in four sessions, as corporate cheer helped offset investor concerns about the U.K.’s political stability and the Brexit process.
Shares of Tesco PLC rose to top the FTSE 100 after a merger deal cleared a major hurdle.
In focus is the release of October inflation figures, the first reading since the Bank of England raised interest rates for the first time in a decade earlier this month.
After increasing pressure on Prime Minister Theresa May sent jitters through the pound, investors will watch a key parliamentary session on the Brexit repeal bill.
What markets are doing: The FTSE 100 index rose 0.2% to 7,428.96, with telecoms, tech and health care shares among advancers. But commodity and consumer goods shares were losing ground. On Monday, the London benchmark closed down 0.2% to reach its lowest level since late September.
The pound traded at $1.3117, little changed from $1.3115 late Monday in New York. Against the euro, sterling bought EUR1.1212, down from EUR1.1240 late Monday.
What’s moving markets: The Office for National Statistics is slated to release its report on consumer inflation for October at 9:30 a.m. London time, or 4:30 a.m. Eastern Time.
Analysts polled by FactSet are looking for an annual rise to 3.1%, which is well beyond the Bank of England’s 2% inflation target. The central bank has said inflationary pressures largely stem from the drop of the pound’s value since last year’s Brexit vote.
The pound rose to regain the $1.31 handle after the U.K. government said late Monday that parliament will get a chance to vote on whether to accept the final Brexit deal. The currency fell after a Sunday Times report (https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0ahUKEwjJwKegh7vXAhVD2KQKHX25AqkQqUMILDAB&url=https%3A%2F%2Fwww.thetimes.co.uk%2Farticle%2Ftory-turmoil-as-40-mps-say-may-must-go-kkg3w6l89&usg=AOvVaw0P3ydYgZ0X_1ThNri40pNZ) at the weekend said 40 Conservative members of parliament have agreed to sign a letter of no confidence in May.
On Tuesday, parliamentary lawmakers will discuss a bill to repeal the law that allowed the U.K. to join the EU.
Check out:Is British leader Theresa May on her way out? Why that’s the fear–and why it matters
What strategists are saying: “Today’s latest October CPI number is expected to see inflation push above the 3% level for the first time since April 2012 and prompt the Governor of the Bank of England to write a letter to the Chancellor of the Exchequer and explain why the central bank has missed its inflation target of 2% by more than 1%,” said Michael Hewson, chief market analyst at CMC Markets.
“One thing is certain the letter isn’t expected to be in the form of a mea culpa,” he said. “While inflation is expected to remain sticky, the U.K. economy has still managed to post some fairly decent numbers in manufacturing as well as services in the past month or so, as the economy continues to prove itself fairly resilient to all the hyperbole uncertainty surrounding the ongoing Brexit discussions.”
Opinion:Brexit hard-liners are selling England by the pound
Stock movers: Tesco shares (>> Tesco) popped up 4.9% after the U.K. Competition and Markets Authority provisionally cleared a merger between Tesco and wholesaler Booker Group (>> Booker Group) . Booker shares off the FTSE 100 climbed 5.2%.
Meanwhile, J Sainsbury PLC (>> J Sainsbury) rose 1.1% after Kantar Worldpanel said the grocer’s sales rose 2.6% in the 12 weeks to Nov. 5, the stronger performance of the so-called Big Four supermarkets. Shares of Wm Morrison Supermarkets (>> Wm Morrison Supermarkets) were up 0.4%.
Vodafone (>> Vodafone Group plc) (>> Vodafone Group plc) jumped 4.4% after the company raised its outlook for fiscal 2018, with pretax profit for the first half rising 55% year-over-year.