By Sara Sjolin and Carla Mozee, MarketWatch
Smurfit Kappa underscores rejection of takeover approach
U.K. stocks advanced Wednesday, finishing at a four-month high as shares of Burberry and Paddy Power Betfair climbed after well-received corporate updates.
The beaten-down pound, which has struggled in recent weeks, also helped lift the London benchmark.
What are markets doing?
The FTSE 100 index rose 0.2% to 7,734.20, its highest close since Jan. 16, according to FactSet data. Wednesday's win was the index's second in a row.
The pound traded at $1.3477, down from $1.3505 late Tuesday in New York. Sterling has dropped almost 6% against the dollar over the past month, hurt in part by a run of weaker-than-expected economic data. A weaker pound tends to boost the FTSE 100 as the index's components make the bulk of their earnings overseas, with a softening sterling lifting revenues when converted back into the U.K. currency.
What is driving the market?
In the absence of any major macroeconomic data releases traders instead looked to the latest corporate news.
Shares of Paddy Power Betfair PLC jumped 6.3% to top the FTSE 100 after the gambling company confirmed it's in talks about a potential merger of its U.S. business with FanDuel Inc . Paddy Power shares have surged 13% this week, boosted by U.S. Supreme Court ruling on Monday that could open for sports betting around the country.
The company in March SHYannounced its then-CEO's resignation and warned of a revenue drop, spurring a big selloff that bulls viewed as overdone .
Meanwhile, shares of Burberry Group leapt 3.6% after the luxury goods company reported a rise in full-year profit and said it would start a new 150 million pound ($202.8 million) share buyback.
More broadly on the global financial scene, traders watched the return of geopolitical tensions after North Korea threatened to call off a historic meeting with the U.S. A senior North Korean official said Pyongyang doesn't want a coming summit to focus solely on denuclearization. U.S. President Donald Trump is scheduled to meet North Korean leader Kim Jong Un on June 12 in Singapore.
Other stock movers
Shares of Micro Focus International PLC jumped 6.2% after the software group said it expects revenue for the first fiscal half of 2018 to be better than forecast due to an unusually large license deal of about $40 million that closed earlier than expected.
Smurfit Kappa Group PLC (SK3.DB) led losses on the main benchmark, down 5.1% after the Irish packaging company reiterated its rejection of a 8.9 billion euro ($10.6 billion) takeover approach from International Paper. Smurfit Kappa also said it welcomes an Irish takeover panel ruling that said International Paper has until June 6 to make a binding offer or walk away.
"The board continues to believe that the best interests of the group's stakeholders are served by pursuing its future as an independent company," said Smurfit Kappa.
Mondi PLC (MND.JO) climbed 3.3% after the paper and packaging company said underlying operating profit rose 15% in the first quarter and its business outlook remains positive.