UK’s FTSE 100 snapped a three-session losing streak on Friday, buoyed by gains in energy stocks, while WPP shares slumped after the world’s biggest advertising group reduced its full-year outlook.
The FTSE 100 ended up 0.5% but still logged its first weekly decline in four weeks, pressured by downbeat earnings and a surprise US credit rating cut.
Heavyweight energy stocks added 2.0% as oil prices ticked higher.
The FTSE 350 media index fell 0.3% as WPP slipped 3.4% to a nine-month low after cutting its full-year like-for-like growth forecast to 1.5%-3.0% from 3%-5%.
“WPP is struggling with lower revenues from North America because of weaker spending from technology clients,” said Victoria Scholar, head of investment at Interactive Investor.
The week included a widely expected quarter percentage point rate hike from the Bank of England, following which three European banks lowered their BoE terminal rate forecast to 5.50% from a prior estimate of 5.75%
Meanwhile, data showed the U.S. economy added fewer jobs than expected in July, but solid wage gains underscored continued tightness in labor market conditions, adding to hopes for a so-called “soft landing.”
“Overall, this increases the chances of rates being at their peak and the Fed (Federal Reserve) pulling off the trick of getting inflation under control whilst keeping the economy strong,” said Neil Birrell, Chief Investment Officer at Premier Miton Investors.
The aerospace and defense sector was the biggest sectoral gainer as shares of Rolls Royce rose 7.4%, extending gains to the second day.
The more domestically-focussed FTSE 250 midcap index rose 0.5% and was 0.9% lower for the week.
A survey showed Britain’s construction sector returned to growth in July but housebuilders suffered another sharp contraction.
Among other stocks, Capita slumped 18.3% after the outsourcing firm said it expected net exceptional costs of up to 20-25 million pounds ($31.8 million) related to a cyber incident in March.
Comments
Comments are closed.