LONDON MARKETS: Plunging Pound And BP Gains Lift The FTSE 100 To 11-month Highs

By Callum Keown

The FTSE 100 climbed to 11-month highs as the pound continued to fall and oil giant BP posted strong results.

The blue-chip index edged up above 7,700 as sterling slid to fresh two-year lows on the increased threat of a no-deal Brexit.

   Sterling   clambered back some of its initial losses on Tuesday. 

What's moving the markets?

The plunging pound and BP's (BP.LN) (BP.LN) strong gains helped the FTSE 100 offset British Gas owner Centrica's (CNA.LN) damaging update and mining giant Fresnillo's (FRES.LN) profit plunge.

Sterling dropped as low as $1.2120 on Tuesday (http://www.marketwatch.com/story/british-pound-collapse-continues-as-sterling-reaches-new-two-year-low-2019-07-30) to fresh 28-month lows before recovering some ground to trade at $1.2163.

The tumbling pound provided support for the internationally-exposed blue-chip index, while the more domestically-focused FTSE 250 fell 0.1%.

AJ Bell investment director, Russ Mould, said: "Weak sterling has been fuelling a rally in the FTSE 100 as nearly three quarters of its constituents earn money overseas and so they benefit when translating that back into pounds.

"The index is now making a run at challenging the 12-month (closing price) high of 7,776."

Which stocks are active?

British Gas owner Centrica plunged 13% as the company posted heavy half-year losses of GBP446 million and announced that CEO Iain Conn will step down next year. The utilities firm also slashed its dividend and revealed plans to exit oil and gas production.

BP shares rose 3.1% after its second-quarter profits of $2.8 billion beat expectations. The oil and gas giant's quarterly production hit 3.8 million barrels per day (http://www.marketwatch.com/story/bp-earnings-flat-as-production-rises-2019-07-30), a 4% increase on the previous year.

Miner Fresnillo's profits fell 69% in the first half of the year due to production problems and higher costs. The company's stock plunged 10.5%.

(END) Dow Jones Newswires

July 30, 2019 07:13 ET (11:13 GMT)

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