London Markets: FTSE 100 looks for 6th win as oil shares rise, pound falls

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U.K. stocks rose on Tuesday, as persistent weakness in the pound helped push the blue-chips market toward a sixth consecutive advance.

How markets are performing

The FTSE 100 index UKX, +0.34% rose 0.4% to 7,430.31, moves that put the index on track to close above the 7,400 level for the first time since early February. Oil and gas and utility shares fared the best but the health care group lagged. On Monday, the index rose 0.4% and closed at its highest since Feb. 2, according to FactSet data.

Read: Here’s why the pound got whipped this week — and why it may bounce back to $1.44

The pound GBPUSD, -0.0430%  bought $1.3936, down from $1.3939 late Monday in New York. In the fixed-income market, the yield on the U.K.’s 10-year gilt TMBMKGB-10Y, -1.77%  was down 1 basis points to 1.506%, according to Tradeweb.

Read: Stock investors are freaking out about bonds ending a bull run—but should they be?

What’s driving the market

Oil and multinational companies were among the best performers, riding on the back of higher oil prices and a lower value of the pound, respectively. Dollar-denominated oil CLM8, +0.68%  and Brent crude LCOM8, +0.48%  prices were fighting off the impact of a stronger dollar ahead of a crude-supply update from the API industry group later Tuesday. Brent crude futures are trading around three-year highs above $75 a barrel.

The pound was also at play as it fell closer toward the $1.39 level and was on course for a sixth straight daily loss against the dollar. A weaker pound can help bolster shares of multinational companies that make the bulk of their earnings and revenue in other currencies. Sterling suffered after members in the House of Lords on Monday voted for an amendment the U.K.’s Brexit bill to keep the EU’s human rights charter a part of British law — seen as a defeat for the U.K. government.

What are strategists saying?

“It is this move higher in crude oil prices, along with the rise in demand, that is helping fuel the recent rise in yields as well as the positive tone for equity markets, however if it continues too far we could start to see it act as a drag on equity markets, if prices along with yields start to move even higher,” said Michael Hewson, chief market analyst at CMC Markets, in a note.

Share movers

Shares of oil producers BP PLC BP., +1.67% BP, +0.94%  tacked on 1.7% and Royal Dutch Shell PLC RDSB, +0.76% RDS.B, +0.89%  rose 0.7% as oil prices moved up.

Among multinationals, shares of consumer products heavyweight Unilever PLC ULVR, +1.37% UL, -0.44%  gained 1.3%, British American Tobacco PLC BATS, +0.85% BTI, +1.49%  rose 0.9%, and defense contractor BAE Systems PLC BA., +1.72%  picked up 1.8%. BAE brings in 42% of its revenue from the U.S. market, according to FactSet data.

London Stock Exchange Group PLC shares LSE, +0.19%  rose 0.7% as the exchange operator said first-quarter gross profit rose 13% after generating double-digit income growth for all its core business units.