The UK’s main stock indexes climbed on Tuesday as investors took comfort from largely upbeat earnings reports, with WPP being a standout gainer, as well as signs of easing price pressures.
The exporter-heavy FTSE 100 rose 0.5% and the domestically focussed FTSE 250 added 0.4% by 0856 GMT.
Both indexes were trading near a three-week high.
Advertisement firm WPP rose 4.6%, the biggest percentage gainer on the FTSE 100, after it forecast 2023 operating profit margin at the top end of its previous guidance.
The British Retail Consortium said prices at shops rose at the slowest annual pace since May 2022 this month, adding to signs of easing inflation pressures ahead of the Bank of England’s (BoE) policy decision this week.
“Recent inflation and wage data suggests diminishing pressure to raise rates, and the central bank appears inclined to wait for a sustained movement towards the 2% inflation target before considering any rate cuts,” said Steve Matthews, investment director at Canada Life Asset Management.
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“This cautious approach is expected to persist in the coming months, with a potential policy shift not anticipated before June, unless major economic shocks occur.”
The BoE is seen holding interest rates on Thursday, and it is a close call on whether the central bank starts trimming borrowing costs next quarter or in July-September, a Reuters poll found.
The indexes were also boosted by a record close for New York’s S&P 500 index on Monday ahead of this week’s slew of megacap earnings, economic data and the Federal Reserve’s monetary policy meeting.
SSP Group climbed 3.1% after the operator of food outlets at airports and train stations posted an over 14% sales growth in its first quarter.
Meanwhile, Diageo slipped 3.4% after the world’s top spirits maker missed first-half sales estimates, as a sharp decline in Latin America weighed on its overall performance.
Deliveroo fell 5.3% after Delivery Hero sold its 4.5% stake in the British meal delivery group in an accelerated bookbuild offering.
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