By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- U.K.'s FTSE 100 headed for its first
gain in three days on Tuesday, with upbeat earnings reports from
GKN PLC and Next PLC lifting the trading mood, although shares of
BP PLC bucked the positive trend amid concerns on the fallout from
new, tough Russia sanctions.
The FTSE 100 index climbed 0.3% to 6,806.90, recovering from a
0.1% loss on Monday.
Leading advancers, shares of GKN rallied 6.8% after the
car-parts maker posted an increase in first-half profit.
Next advanced 2.6% after the clothing retailer raised its
full-year profit guidance and reporting strong sales for the first
half.
Standard Chartered PLC put on 2.2% after J.P. Morgan Cazenove
lifted the bank to overweight from neutral. The analysts said the
upgrade comes after "material underperformance" over the past year
and as they anticipate some of the earnings headwinds to abate from
the end of 2014.
Heavyweight BP (BP) erased earlier gains, losing 0.8% as
uncertainty over the impact of sanctions on Russia hurt investor
appetite. The U.K. oil giant warned in its second-quarter earnings
report that further economic restrictions on Russia and energy
major Rosneft could adversely impact its business.
The U.S. and European Union agreed on Monday to adopt the
toughest sanctions yet on Russia this week to force Moscow to cut
support for the pro-Russia separatists. The EU -- Russia's largest
trading partner -- is expected to announce the new measures as
early as Tuesday when the 28 national ambassadors meet to finalize
the sanctions.
In data news, the Bank of England said the number of loans
approved for house purchases in the U.K. rose more than expected to
a four-month high in June. Approvals came in at 67,196, above the
63,000 expected by analysts.
The improvement signals that the mortgage market is adapting to
tougher measures that have been imposed to dampen risky lending and
take the heat out of the housing markets. BOE officials, including
Governor Mark Carney, and U.K. Chancellor of the Exchequer George
Osborne, have expressed concerns with the rapid rise in home
prices, worried that they could derail the country's economic
recovery.
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