By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Rebounding from a decline, U.K.'s FTSE
100 index moved higher on Wednesday, supported by gains for Sports
Direct International and Tesco. Investors largely shrugged off
better-than-expected U.K. labor-market data.
The London benchmark gained 0.7% to close at 6,584.17, climbing
back after a 0.6% loss from Tuesday.
Sports Direct International PLC jumped 5.6% to 7.88 pounds
($13.19), after Bank of America Merrill Lynch raised its price
target on the sports retailer to GBP10.70 a share, from GBP10.
Tesco PLC also helped drive the U.K. index higher, rising 2.6%
after the supermarket chain reported full-year trading profit ahead
of analyst expectations. Other food retailers tracked Tesco higher,
with shares of Wm Morrison Supermarkets PLC up 0.6% and J Sainsbury
PLC 0.4% higher.
Burberry Group PLC (BURBY) tacked on 3.1% after reporting a rise
in second-half sales, helped by growth online. The luxury-goods
firm warned, however, that it expects currency movements to hurt
profit.
Shares of International Consolidated Airlines Group SA climbed
5.1% after HSBC lifted the company to overweight from neutral,
according to Dow Jones Newswires.
Aside from corporate news, the main event in the U.K. on
Wednesday was the latest labor-market figures from the Office for
National Statistics. The unemployment rate fell to 6.9% in the
three months to February, below the 7.2% print in January and
beating forecasts of 7.1%.
With that drop, the unemployment rate has fallen below the Bank
of England's 7% threshold and likely activates the central bank's
new "fuzzy" forward guidance on interest rates. Under the new
framework, the BOE focuses on a wider range of indicators,
including productivity and salary growth, rather than just the
unemployment level. The ONS said on Wednesday average earnings,
including bonuses, rose 1.7% year-over-year, from 1.4% in
January.
"For now though, we note that a pickup in earnings growth isn't
expected to unnerve the MPC's stance that rates can remain on
hold...for quite some time," Sam Hill, senior U.K. economist at RBC
Capital Markets, said in a note.
The pound (GBPUSD), however, climbed to $1.6796, up from $1.6723
late Tuesday, indicating that currency investors interpret the data
as a case for higher interest rates. Tighter monetary policy would
be supportive for the pound.
More must-reads from MarketWatch:
Can a bull run without growth leaders?
Asia markets live blog: China GDP in focus
Outside of your house, there's almost no inflation
Subscribe to WSJ: http://online.wsj.com?mod=djnwires