MILAN/LONDON: Britain's FTSE 100 jumped on Monday after two leading eurosceptic ministers' resignations dented sterling, with real estate and utilities stocks declining as uncertainty over Brexit negotiations deepened.
The FTSE 100 rose 0.9 percent in its third straight day of gains, outpacing European peers thanks to the slide in the pound as markets continued to benefit from Friday's strong US jobs report.
Analysts said the political tensions were no positive for stocks in longer term, despite the currency effect.
Foreign Secretary Boris Johnson quit in protest at a new Brexit plan presented by Prime Minister Theresa May, heaping added pressure on her less than 24 hours after Brexit Minister David Davis did the same.
Davis said on Monday he would not encourage his colleagues to try to oust May .
But investors saw Johnson's subsequent resignation as making a leadership challenge more likely, and bookmakers cut their odds of an early general election this year.
The FTSE was climbing "for the wrong reasons", a trader said, predicting a snap election.
While international, dollar-earning stocks such as British American Tobacco and Imperial Brands gained with sterling's fall, some domestic sectors suffered as the resignations added to political uncertainty.
Utilities were the worst-performing, with Severn Trent bottom of the FTSE 100, while real estate stocks - seen as especially vulnerable to a messy Brexit - were also bruised.
Real estate agencies Foxtons and Countrywide were the two worst hit on the small-cap index, down 6.2 and 5.1 percent respectively.
Real estate stocks were the biggest drag on the FTSE 250 too, with student accommodation group Unite down 1.3 percent and property developer Capital & Counties down 1.4 percent.
Miners and energy stocks continued to drive the FTSE's rise.
Mining company BHP rose 2.7 percent after Reuters reported that BP was set to buy its US onshore shale oil and gas assets after an offer worth more than $10 billion .
Antofagasta also gained as copper rallied on receding worries about global economic growth.
Mid-cap precious metal miner Centamin fell 3.3 percent after second-quarter gold production fell, disappointing investor expectations.
Oil majors Royal Dutch Shell and BP were the biggest boosts to the index as crude prices climbed.
Inmarsat shares jumped 7.2 percent, after news US satellite group EchoStar does not intend to make an offer for the British peer, which had rejected a $3.2 billion approach. Traders cited hopes for another suitor and possible short covering.
Just Eat rose 2.4 percent after RBC upgraded the stock to top pick.
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