London shares rose on Wednesday, thanks to well-received results from Lloyds Banking Group and WPP, while gains from energy companies and weakness in the pound also helped boost the FTSE 100. The UKX index, + 0 , 38%, was up 0.5% to 6,976.35, with the GBPUSD, -0.25% down 0.3% against the dollar, as the dollar rose across the board before the result of a meeting of the Federal Open Market Committee later. A weak pound works in favor of UK exporters earning income from abroad.
The yield on the British 10-year BX: TMBMKGB-10Y rose 4 basis points to 0.821%, increasing in line with the yields on US Treasuries BX: TMUBMUSD10Y. Rising CL.1 oil prices, + 0.92% BRN00, + 0.88% gave a boost to heavily weighted energy companies, with shares of BP BP, + 0.08% BP, + 2, 59% up to 2.7% and Royal Dutch Shell RDSA, + 1.14% RDS.A, + 0.55% up to 1.5%. The gains also came a day after BP’s earnings increased earlier forecasts. Topping the earnings action, Lloyds Banking Group LYG, + 3.00% LLOY, + 2.39% reported a sharp increase in first quarter earnings before tax and beat expectations thanks to an impairment credit. The British bank improved its outlook for the year and shares rose 3%. “The 459 million pounds [$636 million] Recovered from bad debt provisions helped lift earnings to an impressive £ 1.9bn, ”Joshua Mahony, IG Senior Market Analyst, said in a note to clients. “While the economic crisis continues, the release of funds highlights the success of [Chancellor of the Exchequer] Rishi Sunak’s policies aimed at limiting the consequences of the [COVID-19] pandemic over the past year. Elsewhere, WPP WPP shares, -0.99% WPP, + 4.00% rose 4%, after the world’s largest advertising group by revenue crushed sales expectations in the first quarter of 2021. It marks the first return to growth for WPP since the COVID-19 pandemic began. “The economic recovery around the world will give companies confidence to increase advertising activities,” said Russ Mold, chief investment officer at AJ Bell, in a note to clients. Another FTSE 100 heavyweight, British American Tobacco BTI, -0.13% BATS, + 0.32%, reported a 3.3% increase in first quarter revenue, above its revised guidance range of 1% to 3%. The tobacco maker also endorsed its guidance for the entire year. The shares were up 0.3%. GlaxoSmithKline GSK shares, -0.01% GSK, -0.13% rose 0.5%, after the pharmaceutical company took an earnings hit but reported disappointing sales. A bearish leader, J Sainsbury SBRY, shares -2.60% fell 3%. The British grocer had a pre-tax loss for fiscal 2021 as the pandemic increased costs and offset rising revenues. “Supermarkets have done a stellar job of keeping their shelves stocked during the pandemic and expanding capacity online, but this hard work is not translating into a sharp increase in profits as some people might have expected,” said Mold. Another decline was Reckitt Benckiser RKT, -2.51%, which reported a slight drop in first-quarter revenue, despite strong results from its hygiene unit amid the pandemic. In his look to the future, the owner of the Dettol, Harpic and Durex brands said he sees an improvement in business conditions for his healthcare unit. Shares fell 2% in London.