FTSE 100 crawls higher as consumer stocks climb; Vodafone slides

UK's main stock index edged up on Tuesday as weakness in sterling boosted shares of some export-oriented firms, although Vodafone Group shares hit a four-month low after it forecast a big drop in fresh cash flow. The telecom giant's stock fell 3.9% to become the top decliner on the FTSE 100 after the company announced job cuts and forecast a 1.5 billion euro ($1.65 billion) decline in free cash flow this year.

UK's main stock index edged up on Tuesday as weakness in sterling boosted shares of some export-oriented firms, although Vodafone Group shares hit a four-month low after it forecast a big drop in fresh cash flow.

The telecom giant's stock fell 3.9% to become the top decliner on the FTSE 100 after the company announced job cuts and forecast a 1.5 billion euro ($1.65 billion) decline in free cash flow this year. "Vodafone's report plays into the story that maybe companies are beginning to see the impact of a more challenging macro environment," said Richard Flax, chief investment officer at Moneyfarm.

"In a high interest rate environment, investors will be looking unfavourably to companies with the potential for balance sheet stress." The blue-chip FTSE 100, however, rose 0.2%, lifted by shares of dollar earners like Unilever and British American Tobacco.

The pound was under pressure after data showed UK unemployment unexpectedly rose in the first quarter, fuelling hopes of a pause in the Bank of England's rate-hike cycle. UK stock indexes have mostly traded in tight ranges this month as sharp declines in commodity-linked stocks amid concerns about a weak economic recovery in top consumer China and a U.S. debt ceiling deadlock, dampened investor sentiment.

The FTSE midcap index also rose 0.2%. Among other movers, Land Securities Group rose 2.4% after the real estate firm beat expectations on a key property valuation metric.

Boohoo Group surged 12.7% after the online fashion retailer forecast a better performance in its new financial year. Diageo climbed 1.6% after Berkshire Hathaway Inc

revealed a new $41.3 million stake in the maker of alcoholic beverages.

($1 = 0.9084 euros)