LONDON – Britain’s top equity index pushed higher on Thursday, boosted by a bump-up for utilities stocks just two weeks before a general election, while mining stocks also outperformed.
United Utilities climbed 1.1 percent, SSE advanced 1.4 percent and National Grid rose 0.6 percent after investment bank Citigroup said the sector would be favoured as a protection against any market volatility caused by the election.
Utility stocks are often preferred in times of market unease due to their stable profits and relatively high dividend yields.
Even though uncertainty over the May 7 vote has hit sterling on currency markets, Britain’s benchmark FTSE 100 index has been relatively steady.
The FTSE 100 closed up 0.4 percent at 7,053.67 points, near a record high of 7,119.35 reached on April 16. The index is up 7.4 percent so far in 2015.
While no single party is expected to win an outright majority, the UK stock market has shown few signs of edginess as some investors choose to stay steady rather than cash out on a market still trading near record highs.
Opinion polls put the right-wing Conservatives neck-and-neck with the opposition left-wing Labour party, while the Scottish National Party (SNP) could emerge as the third-biggest party.
A further risk also stems from the Conservatives promising a referendum on Britain’s membership of theEuropean Union by the end of 2017, if they win.
“The Conservatives are so driven by this European vote, it’s a red line for them. It’s possible that a weak Labour coalition may be marginally better for the stock market, although I suspect it won’t matter one way or another as long as it doesn’t include the SNP,” said Ewen Cameron Watt, global chief investment strategist at BlackRock Investment Institute.
Shares in sportswear retailer Sports Direct and electrical goods group Dixons Carphone weakened after an unexpected fall in UK retail sales data.
WPP, the world’s biggest advertising company, also fell after posting a slowdown in first-quarter like-for-like net sales, which traders said were more sluggish than anticipated.
However, supermarket chain Sainsbury rose after deciding to axe 800 store jobs in a drive to cut costs.
Mining stocks such as Antofagasta and Anglo American also performed well. Antofagasta was helped by its plan to sell off a business for $965 million while Anglo American benefited from higher iron ore output at its Kumba unit.