U.K. stocks moved higher on Wednesday, heading for a four-month closing high as shares of Micro Focus International and Burberry climbed after well-received earnings reports.
The beaten-down pound, which has still struggled to rebound, also helped lift the London benchmark.
What are markets doing?
The FTSE 100 index UKX, +0.04% rose 0.2% to 7,738.62, on track for its highest close since Jan. 16, according to FactSet data.
The pound GBPUSD, -0.2369% traded at $1.3505, unchanged from late Tuesday in New York. Sterling is now down almost 6% against the dollar over the past month. A weaker pound tends to boost the FTSE 100 as the index’s components make the bulk of their earnings overseas, with a softening sterling lifting revenues when converted back into the U.K. currency.
What is driving the market?
In the absence of any major macroeconomic data releases traders instead looked to the latest corporate news.
Shares of Micro Focus International PLC MCRO, +9.06% jumped 8.7% to lead the FTSE 100 after the software group said it expects revenue for the first fiscal half of 2018 to be better than forecast due to an unusually large license deal of about $40 million that closed earlier than expected.
The company in March announced its then-CEO’s resignation and warned of a revenue drop, spurring a big selloff that bulls viewed as overdone.
In other upbeat corporate news on Wednesday, shares of Burberry Group PLC BRBY, +2.08% BURBY, -0.57% rose 1.7% after the luxury goods company reported a rise in full-year profit and said it will start a new 150 million pound ($202.8 million) share buyback.
More broadly on the global financial scene, traders watched the return of geopolitical tensions after North Korea threatened to call off a historic meeting with the U.S. A senior North Korean official said Pyongyang doesn’t want an upcoming summit to focus solely on denuclearization. U.S. President Donald Trump is scheduled to meet North Korean leader Kim Jong Un on June 12 in Singapore.
Other stock movers
Shares of Paddy Power Betfair PLC PPB, +5.61% rose 3% after the gambling company confirmed it is in talks about a potential merger of its U.S. business with FanDuel Inc. Paddy Power shares are now up 13% this week, boosted by U.S. Supreme Court ruling on Monday that could open for sports betting around the country.