By Carla Mozee, MarketWatch

Pound drops as BOE policy maker supports more stimulus

U.K. stocks edged up Tuesday, with shares of SABMiller PLC gaining after a raised takeover offer for the brewer, but BP PLC shares dropped following financial results.

The FTSE 100 was up 0.1% at 6,718.98, but pared gains after opening modestly higher. The index on Monday ended lower by 0.3%. (http://www.marketwatch.com/story/ftse-100-clings-to-thin-gain-as-banks-drift-lower-2016-07-25)

Investors had plenty of corporate updates to assess Tuesday. Among them, SABMiller (SAB.JO) received an increased takeover bid from Anheuser-Busch InBev NV (http://www.marketwatch.com/story/ab-inbev-increases-offer-for-sabmiller-2016-07-26-3485537)(ABI.BT) (ABI.BT), to GBP45 a share ($58.85) from GBP44 a share.

The new offer, which values SABMiller at about GBP79 billion ($104 billion), comes as the British pound has slid in the wake of last month's Brexit vote that will lead the U.K. out of the European Union.

Shares of Belgium-based Anheuser-Busch were up 0.2%. The pound, meanwhile, was coming under renewed pressure on Tuesday.

Meanwhile, BT Group PLC (BT.A.LN) popped up 3.6% as the U.K.'s telecommunications regulator Ofcom called for BT's Openreach network business to have its own structure, but stopped short of calling for a full separation of the businesses (http://www.marketwatch.com/story/bt-arm-should-have-separate-structure-regulator-2016-07-26).

Among decliners, BP PLC shares (BP.LN) (BP.LN) fell 2% after the oil and gas major posted quarterly underlying earnings of $720 million (http://www.marketwatch.com/story/bp-posts-replacement-cost-of-225-billion-2016-07-26), falling short of analysts' consensus of $839 million.

BP also posted a second-quarter replacement cost loss -- analogous to the net income that U.S. oil companies report -- of $2.25 billion as it booked a multibillion-dollar charge relating to its 2010 Gulf of Mexico rig blowout and oil spill.

Shares of rival oil major Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) were off 0.8%. Shell's financial results are due on Thursday.

Sterling slips: The pound dropped to $1.3085 compared with $1.3140 late Monday. The currency was driven lower after Bank of England policy maker Martin Weale, in a Financial Times interview published Tuesday (http://www.ft.com/cms/s/0/03c877ce-5272-11e6-9664-e0bdc13c3bef.html#axzz4FV4zBQoH), indicated he's now supportive of further stimulus measures by the central bank to aid the British economy in the wake of the Brexit vote.

Weale pointed to Markit's PMI report released Friday that showed contraction in the manufacturing and services sectors (http://www.marketwatch.com/story/uk-economy-in-dramatic-downturn-after-brexit-vote-data-show-2016-07-22) in July as a factor in his view.

 

(END) Dow Jones Newswires

July 26, 2016 04:28 ET (08:28 GMT)

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