By Helen Reid
LONDON (Reuters) - British shares rose on Tuesday, boosted by a weak sterling and housebuilders stocks, while services company DCC (L:DCC) surged on news of a purchase from ExxonMobil.
Sterling fell to its lowest in two weeks against the dollar, contributing to gains for Britain's blue-chip FTSE index (FTSE) which has many dollar-earning constituents. The FTSE was up 0.6 percent at 0955 GMT.
DCC rose to the top of the FTSE after the company said it would buy a retail petrol station network of ExxonMobil's (N:XOM) Norwegian unit, Esso Norge AS, for 2.43 billion Norwegian crowns ($293.38 million).
Shares in the Ireland-based company were up 6.7 percent and headed for their biggest one-day gain since Nov. 2015.
Oil major BP (L:BP) suffered after the company reported 2016 profit slumped to the lowest level in at least a decade, to $2.59 billion. BP shares were down 2.8 percent, the worst-performing FTSE stock. The FTSE 350 oil & gas index (FTNMX0530) was the only sector index in negative territory.
Engine maker Rolls Royce (L:RR) was a top gainer, up 2.8 percent. The stock figured in Citi bank's 'top calls' for the day. "Results next week should mark the inflection from fire-fighting to looking to the future," Citi analysts wrote in a note.
Materials stocks were the top sectoral gainer. Rio Tinto (L:RIO), which reports earnings on Feb. 8, was a top gainer along with peers Fresnillo (L:FRES) and Randgold Resources (L:RRS). The FTSE miners benefit from a weaker pound due to their operations abroad.
Education group Pearson (L:PSON), which suffered its worst-ever daily fall on Jan. 18, was a top gainer, up 2.8 percent after Morgan Stanley (NYSE:MS) raised its target price on the stock to 615p from 550p.
Housebuilders Taylor Wimpey (L:TW), Barratt Development (L:BDEV) and Persimmon (L:PSN) were gaining ground, up between 2.2 and 3.4 percent, after closing in negative territory yesterday.
The government was expected to publish details of a new housing strategy on Tuesday.
The mid-cap FTSE 250 index (FTMC) outperformed the blue-chip index, up 0.8 percent with workwear and hygiene company Berendsen (L:BRSN) leading the gains, up 5.4 percent after RBC analysts upgraded the stock to "outperform" from "sector perform", saying the European business was in good shape.
The small-cap index (FTSC) was up 0.2 percent, underperforming its peers as energy stocks weighed.
Premier Oil (L:PMO) was the top faller, down 5.9 percent after a downgrade from "buy" to "hold" from Deutsche Bank (DE:DBKGn) analysts, citing underperformance from the company's Solan field in the North Sea.