LONDON MARKETS: Tesco Helps Push FTSE 100 Higher; Pound Climbs After Labor Data

By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- U.K. stocks edged up Wednesday, with Tesco PLC gaining as it named its new chairman, while the pound popped higher after the release of labor-market data.

Investors will be watching for the latest headlines on Greece's debt situation, with the European Central Bank set to review its emergency funding for Greek banks later.

Sterling: The pound (GBPUSD) recaptured the $1.54 level against the U.S. dollar after the arrival of U.K. labor-market data for the three months through December. The pound was buying $1.5431, versus $1.5354 late Tuesday.

The country's unemployment rate dipped to 5.7%, from 5.8% in the three months through October, according to the Office for National Statistics. That reading met widely held expectations. Average weekly earnings rose 1.7%, excluding bonuses, compared with expectations of 1.8% growth.

At the same time, the Bank of England released minutes from its Feb. 5 meeting. While policy makers voted unanimously to leave the key interest rate at 0.5%, two of them said the decision was a "finely balanced" call, and that "there may well be a case" for a rate increase later in 2015.

Stocks: After the data and the BOE minutes, the FTSE 100 began to reduce its gain to 0.1% at 6,898.81. The FTSE has been hovering around its highest level since 1999, when it hit an all-time high of 6,930.20.

Tesco shares were amongst the advancers, rising 0.6% as Britain's largest supermarket chain named John Allan as its chairman. His tenure will begin on March 1, as he takes over from Richard Broadbent. The company is undergoing a sweeping overhaul under the leadership of new chief executive, Dave Lewis.

Allan currently serves as chairman of home builder Barratt Developments PLC and deputy chairman of Dixons Carphone PLC .

Deutsche Bank on Tuesday upgraded Tesco to a buy rating from hold, saying the company "has shown three months of improved sales performance and the discounters share growth has slowed."

Royal Bank of Scotland PLC paced advancers as the bank's shares rose 2%, and energy engineering firm Weir Group PLC rose 1.8%.

But decliners included Coca-Cola HBC AG , which fell 3.3% after the bottler posted a decline in fourth-quarter net profit and warned of a persistent volatile environment this year.

Rolls-Royce Holdings PLC shares were off 0.3%, as J.P. Morgan downgraded the engine maker to underweight from neutral.

Greece: In an apparent softening of stance, Greece will seek a six-month extension to its loan agreement Wednesday, an official has said. The ECB will review its emergency liquidity assistance to Greek banks, a program known as ELA, which it introduced earlier in February.

See: Why the ECB's unlikely to cut off Greek banks' emergency funds

Subscribe to WSJ: http://online.wsj.com?mod=djnwires