Investing
Defensive stocks lead rebound in FTSE 100
Global Banking & Finance Review®
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By Boleslaw Lasocki
(Reuters) -UK’s FTSE 100 rose on Friday, lifted by defensive stocks at the end of a choppy week that saw investor anxiety over hawkish central banks, weak economic readings and heightened risks of a global recession.
The blue-chip index climbed 1.2%, with healthcare and consumer staples stocks that tend to decouple from economic cycles, rising the most. The domestically focussed FTSE 250 also rose 1.2%.
The FTSE 100 was set to snap a three-week run of losses, while the mid-cap index was on pace for its fourth consecutive weekly decline.
Data showed British retail sales volumes slid by 0.5% in May, showing that consumers cut back on shopping in the face of rapid inflation last month, and an increase in sales in April was revised down sharply.
A separate data showed consumer confidence in the UK hit a record low this month.
“It is not just the rising bills of today that are worrying us, it is the prospect of even higher bills tomorrow, and fears of a looming recession, which might cause our finances to unravel entirely,” Hargreaves Lansdown analyst Sarah Coles said.
Adding to worries, Boris Johnson’s Conservatives lost two parliamentary seats on Friday, a crushing blow to the governing party that has intensified doubts about the future of Britain’s prime minister.
Among stocks, Ultra Electronics gained 12.6% after Britain moved forward on approving the acquisition of the defence firm by rival Cobham, after having raised security concerns over the planned transaction.
Shares of GSK rose 1.5% after French drugmaker Sanofi said the vaccine against the Omicron variant of COVID-19, which the two companies worked on jointly, had proved effective.
(Reporting by Boleslaw Lasocki in Gdansk; Editing by Rashmi Aich and Sherry Jacob-Phillips)
Consumer confidence is a measure of how optimistic or pessimistic consumers are regarding their expected financial situation and the overall economic outlook. High consumer confidence typically leads to increased spending.
The FTSE 100 is a stock market index that represents the 100 largest companies listed on the London Stock Exchange, based on market capitalization. It is a key indicator of the UK stock market's performance.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI).
A recession is a significant decline in economic activity across the economy that lasts for an extended period, typically visible in real GDP, income, employment, manufacturing, and retail sales.
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