Posted By Jessica Weisman-Pitts
Posted on August 8, 2022
By Sruthi Shankar
(Reuters) -Britain’s blue-chip index closed at a two-month high on Monday, boosted by economically sensitive sectors such as oil & gas and banks as upbeat economic data from China and the United States eased worries about an imminent recession.
The FTSE 100 gained 0.6% to mark its strongest close since June 9, while the domestically focussed midcap index rose 0.3%.
Oil majors Shell and BP rose about 1% each as crude prices bounced following strong U.S. jobs data and Chinese exports numbers, which picked up unexpectedly in July. [O/R]
Global miners Anglo American and Rio Tinto rose, tracking stronger metal and iron ore prices, while rate-sensitive banks also climbed. [IRONORE/] [MET/L]
“We still remain bullish on oil, banks and mining sectors,” said Alan Custis, head of UK equities at Lazard Asset Management, adding that their view was it was not going to be a long and deep recession.
“Most of these sectors have done well so far this year but one can make a strong argument to say that they’re still looking pretty robust for the balance of the year.”
Growth figures, expected to show a contraction during the second quarter, will be released on Friday, a week after the Bank of England said it expects the United Kingdom to enter a recession in the fourth quarter and not emerge until 2024.
Worries about a recession have weighed on the FTSE 250 index, more exposed to the domestic economy, with the index down almost 15% this year.
However, the FTSE 100 has outperformed its global peers with a 1.3% gain so far in 2022, as soaring commodity prices boosted mining and oil giants, while banks benefited from a jump in interest rates.
Investment platform Hargreaves Lansdown rose 7.2%, extending gains a day after it beat annual profit expectations.
PageGroup fell 7.2% as the global recruiter noted a “slight slowing in time to hire” in July across some of its markets.
Joules Group soared 33.3% after the fashion group said it was in talks over a potential equity investment of about 15 million pounds ($18.11 million) from retailer Next Plc.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Neha Arora and Shounak Dasgupta)
