London’s FTSE 100 inched higher on Tuesday after a three-day sell off, as resource and defensive stocks rose, while HSBC Holdings and Associated British Foods slid following earnings updates.
The blue-chip index closed 0.1% higher, a day after hitting its lowest closing level since March 18.
Oil majors Shell and BP rose 2.4% and 2.9% respectively, while Glencore led advances among miners with its 3.4% rise after Barclays raised the stock’s price target.
However, gains were capped overall on global growth fears stoked by China’s strict COVID-19 curbs and an expected streak of aggressive policy tightening by central banks.
“The market is trying to find its footing and trying to price what’s happening in China,” said Sebastien Galy, a senior macro strategist at Nordea Asset Management.
“What you probably can say is it’s indeed a buy on dip but it is done without any sense of certainty … and especially European equities are quite cheap.”
Defensive names AstraZeneca, Unilever, British American Tobacco and Diageo gained between 0.8% and 1%, providing the biggest boost to the FTSE 100 index.
The domestically focused midcap FTSE 250 index fell 0.5%, weighed by weakness in consumer discretionary shares.
Associated British Foods slid 5.0% after it warned on margins at its food businesses and said its clothing chain Primark is set to raise prices due to severe inflationary pressures.
“This is a tricky manoeuvre to get right, given that fans flock to Primark for high fashion at cheap prices and instead of piling clothes high in baskets they may be more cautious which could hit volumes,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.
HSBC Holdings fell 5.5% after Europe’s biggest bank warned that more share buybacks were unlikely this year as rising inflation and economic weakness had dented its prospects.
Taylor Wimpey jumped 0.5% as the country’s third-largest housebuilder projected sustained demand in an under-supplied market.
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