UK equities end higher as Brexit turmoil casts a shadow over May government

U.K.. Shares ended slightly up in a turbulent action on Tuesday as traders pondered the political turmoil that raised the prospect of a new general election and potentially muddling the Brexit talks.

A series of British economic data was also highlighted, including the first monthly publication on gross domestic product growth.

What are the markets doing?

The FTSE 100 Index

UKX, + 0.05%

increased by less than 0.1% to close at 7,692.04, up for a fourth consecutive day.

Gain adds to a 0.9% hike from Monday, when the pound plummeted on the news Foreign Minister Boris Johnson resigned in disagreement with Prime Minister Theresa's position May on the Brexit. A lower pound can boost the FTSE 100, since most multinational index companies generate most of their sales in other currencies.

Sterling

GBPUSD, + 0.1131%

struggled to recover Tuesday from $ 1.3255 to $ 1.3258 Monday night in New York.

What motivates the market?

Traders continued to monitor the political landscape in the UK following a series of large resignations on Monday-Johnson and Brexit Minister David Davis. Movements were seen as making it more likely that Prime Minister Theresa May could face a leadership challenge and send U.K. voters to the polls at a crucial time in the Brexit negotiations with Brussels.

A general election in 2018 seemed more likely after the resignations, Betfair's chances now implying a 40% probability of a vote this year versus 17% before the weekend.

Read: The Brexit Crisis: 4 Things Investors Need to Know

Analysts also pointed out that the government crisis could make Brexit "without agreement" more likely and send Great Britain Britain out of the EU on trade.

"For now, scrutinizing the future in Westminster is no easier than in the context of financial markets," said Russ Mold, director of investments at AJ Bell in a note. "As such, the best thing investors can do is stay seated and not be diverted from their long-term plan and portfolio allocation."

Economic Data

] A lot of economic data hit the markets in the morning trade. For the first time, the Office for National Statistics released a monthly GDP figure instead of its usual quarterly figures. The report showed that the UK's economy grew 0.2% over the three months to May, up from steady growth over the three months up to April.

The trade deficit in the United Kingdom widened from £ 5 billion to £ 8.3 billion in the three months to May, as car exports declined.

Production declined 0.4% in May, missing an estimate of an increase of 0.6%.

Manufacturing output rose 0.4% in May, a forecast of 0.7%.

Movers of Stocks

Shares of Ocado Group PLC

OCDO, + 9.05%

climbed 9.1% even after the online grocer said that he had suffered a pre-tax loss in the first half of FY 2018.

Read more: Stocks may need to digest a Kroger pop

Tesco PLC

TSCO, -2.00%

TSCDY, -1.79%

dropped 2% after the British supermarkets giant said that its Tesco CEO in the UK United Kingdom and Republic of Ireland, Charles Wilson will leave the board of directors for health reasons.

Shire PLC

SHP, + 0.16%

SHPG, + 1.04%

gained 0.2% after the US Federal Trade Commission gave the go-ahead at Takeda Pharmaceutical Co. Ltd.

TKPYY, + 0.02%

proposed a $ 62 billion takeover of the British drug maker.

Outside of the FTSE 100 index, shares of TP ICAP PLC

TCAP, -35.91%

sank 36% after the inter-store broker issued a profit warning for 2018 and executive director John Phizackerley resigned with immediate effect.