UK’s FTSE 100 rose on Friday, pulled higher by beaten down energy and bank stocks, as the mood in the market improved after data showed the British economy performed better-than-expected in the second quarter. The export oriented index rose 0.8% at 0837 GMT, while the midcap FTSE 250 climbed 1.7%.
The Office for National Statistics said economic output unexpectedly rose by 0.2% in April through June, revised upward from a previous reading of a 0.1% contraction, but remained below its pre-pandemic peak.
“Though it really does not change anything, it does mean the economy is suddenly on a sounder footing and may not be in a technical recession”, said Craig Erlam, senior market analyst, Oanda. The energy sector was up 1.3%, supported by oil prices that rose on possibilities of crude output cuts by the OPEC+.
Banks gained by 1.5%. Markets climbed on the last day of a week that saw financial chaos spiralling across UK markets following what analysts call a policy tug-of-war between the government and the central bank. “The financial stocks move along with risk appetite in the market. Any type of stabilisation will typically see financials perform well”, Erlam added.
“So, I do think the central bank intervention offered some stability and stopped the bleed to an extent.” Stock markets have been hit globally this year amid worries that aggressive monetary policy tightening to curb inflation could tip economies into recession.
The FTSE 100 has lost 6.2% so far in 2022 and on pace for second straight quarterly decline.
London stocks slide as policy woes continue
The more domestically oriented FTSE 250 has slumped 8.6% for the July-September period and set to notch its third straight quarterly decline in what will be its longest such losing streak since 2008.
For the month, it shed 10.5% Joules Group surged 37.8% along with the rest of the sector, as the struggling British retailer said that its turnaround plan, focused on boosting profitability, was making good progress.
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