Politics and pound keep UK's FTSE steady

LONDON: The UK's top share index edged higher on Tuesday as investors assessed the implications of recent turmoil in Prime Minister Theresa May's cabinet while keeping one eye on the upcoming earnings season.

The blue chip FTSE 100 index was up 0.1 percent at 7,692.11 points by 0901 GMT, helped by gains for big energy, while mid caps were also up 0.1 percent.

Politics were back in focus after two Eurosceptic British ministers quit on Monday in protest at Prime Minister Theresa May's Brexit plans.

The reaction in markets, however, has been relatively muted, with sterling giving up earlier gains after official data showed that Britain's economy picked up a bit of speed in May after a slowdown in early 2018, which in turn eased the pressure off the FTSE slightly.

"Our expectation is that the PM will survive this, and push ahead with her vision for Brexit," strategists and economists at UBS wealth management said.

"UK stocks have performed relatively well as their international exposure and high weighting to commodities has boosted earnings. We expect these trends to persist for some time yet," they added.

As Europe is about to step into the second-quarter earnings season, the focus is turning to company results. Shares in Ocado  hit a three-week low but the majority of their earlier losses to trade just 0.1 percent lower after increased investment dented the online supermarket's first-half earnings.

Ocado's shares are up nearly 150 percent so far in 2018.

"The general market view of the company remains at a buy, despite this stratospheric rise and regardless of some inevitable profit-taking as seen in early trade," Richard Hunter, head of markets at interactive investor, said.

TP ICAP was a heavy faller among the mid caps, down 32 percent and on track for its worst day on record after the interdealer broker issued a profit warning and said that its CEO was stepping down.

Deal-making was also in focus following a report that  Twenty-First Century Fox Inc is preparing a new bid for Sky, valuing the firm at about 25 billion pounds ($33.14 billion) to top the offer it has received from Comcast Corp.

Sky's shares rose 1.5 percent, and were among the top FTSE gainers.