Britain's FTSE rises, boosted by weak sterling, DCC

Tue, 07th Feb 2017 17:28

* FTSE 100 up 0.2 percent at close

* UK mid caps mark record closing level

* Services company DCC top of blue-chip index

* BP flounders after profit slumps (Adds detail, updates prices at close)

By Kit Rees and Helen Reid

LONDON, Feb 7 (Reuters) - British shares rose on Tuesday,boosted by a weak sterling and a surge in services company DCC, while UK mid caps posted a record closing level.

Sterling fell to its lowest in two weeks against the dollar,contributing to gains for Britain's blue-chip FTSE indexwhich has many dollar-earning constituents.

The FTSE 100 ended the session 0.2 percent higher at7,186.22 points while the British mid cap index closed 1percent higher at a record closing level of 18,559.70 points.

DCC was the top performer among the blue chips, rising afterthe company said it would buy a retail petrol station network ofExxonMobil's Norwegian unit, Esso Norge AS, for 2.43billion Norwegian crowns ($293.38 million).

Shares in the Ireland-based company were up 5.6 percent andmarked their biggest one-day gain since Nov. 2015.

Oil major BP suffered after the company said its 2016profit slumped to the lowest level in at least a decade, to$2.59 billion. BP shares were down more than 4 percent, theworst-performing FTSE stock. The FTSE 350 oil & gas index dropped more than 2 percent.

Engine maker Rolls Royce, however, was a top gainer,up almost 3 percent. The stock featured in Citigroup's 'topcalls' for the day.

"Results next week should mark the inflection fromfire-fighting to looking to the future," Citi analysts wrote ina note.

Materials stocks were the top sectoral gainer, helped by aweaker pound due to their operations abroad. Precious metalsminers Fresnillo and Randgold Resources werethe biggest gainers, both up more than 4 percent.

Education group Pearson, which suffered itsworst-ever daily fall on Jan. 18, was also a top gainer, up 3.6percent after Morgan Stanley raised its target price on thestock to 615p from 550p.

Among the mid caps, which outperformed their blue chippeers, workwear and hygiene company Berendsen rosealmost 7 percent after RBC analysts upgraded the stock to"outperform" from "sector perform", saying the European businesswas in good shape.

The small-cap index was up 0.4 percent, also hittinga record high and closing at 5,294.21 points, its highestclosing level on record. (Reporting by Kit Rees and Helen Reid; Editing by CatherineEvans)