By Carla Mozee and Victor Reklaitis, MarketWatch

Pound hit by disappointing economic reading

U.K. stocks moved higher Tuesday as airline EasyJet PLC and supermarket stocks drew the market to a second winning day in a row.

The FTSE 100 gained 0.6% to end at 6,792.74.

Shares of EasyJet (EZJ.LN) gained 5.3% even as the budget carrier posted a 22% drop in net profit ( and signaled earnings this year remain under pressure. The low-cost airline cut its dividend to 53.8 pence a share from 55.2 pence a share."Even after the dividend cut, the shares should still yield around 5%, a punchy return in the current environment. Meanwhile, there are some reasons for cheer, with a record number of passengers and load factor being coupled with a reduction in cost per seat and increased capacity," said Richard Hunter, head of research at Wilson King Investment Management, in a note.

A decision by Warren Buffett's Berkshire Hathaway to bulk up on airline shares ( also boosted sentiment about the sector.

Retail cheer: Meanwhile, supermarket stocks got a lift after Kantar Worldpanel and Neilsen released the results of market surveys.

Tesco PLC (TSCO.LN) shares were up 5.4% after Kantar said its sales grew 2.2% during the 12 weeks ending Nov. 6, the strongest growth rate in three years (esco%20PLC%20(TSCO.LN)%27s%20market%20share%20and%20sales%20have%20risen%20for%20the%20second%20consecutive%2012-week%20period,%20with%20sales%20again%20boosted%20by%20%27Farm%20Brands%27%20and%20its%20standard%20own-label%20lines,%20according%20to%20a%20market%20survey%20Tuesday.). Its market share inched up to 27.7% in a similar period, Neilsen found.

Shares of Wm. Morrison Supermarkets (MRW.LN) picked up 4.4%, while those of J. Sainsbury (SBRY.LN) rose 2.2%.

Movers and shakers: British American Tobacco PLC (BATS.LN) was up 0.5% after the company said it's willing to increase slightly its $47 billion buyout offer ( for Reynolds American Inc. (RAI), according to a person familiar with the matter.

But mining stocks were under pressure, with Glencore PLC (GLEN.LN) down 5.5% and Antofagasta PLC (ANTO.LN) off 5% as copper prices fell sharply.

Sterling: The pound was shoved down to an intraday low of $1.2361 after the Office for National Statistics said U.K. annual consumer-price inflation came in at 0.9% in October (, missing expectations of a 1.1% rise. The pound eventually rose to $1.2417, but it was still down from $1.2493 late Monday.

"The 'miss' on today's headline inflation figure distracts from the broader picture...which is one of marked and growing inflation pressures at the factory gate," said Investec economist Victoria Clarke in a note.

Factory gate prices rose 2.1%, the fastest annual rate since April 2012.

"Such production level price pressures should be reflected in headline inflation over the months ahead as the effect of the 12% fall in trade weighted sterling, since the Brexit vote, finds its way through the production chain to consumer prices, eventually squeezing household real spending power," Clarke wrote.

"Unfortunately, inflation is going to go up," Bank of England Mark Carney told lawmakers in testimony on Tuesday. "That's the consequence of a very large move in the exchange rate."

The FTSE on Tuesday built on Monday's gain of 0.2% (, which came after blue chips retreated from session highs as oil prices slid. Crude was up sharply Tuesday (

Read:Under Trump, the dollar may again be Europe's problem ( (

(END) Dow Jones Newswires

November 15, 2016 12:44 ET (17:44 GMT)

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