Investing
UK shares climb on boost from financial stocks, strong results
Global Banking & Finance Review®
Company
By Devik Jain
(Reuters) -London’s main indexes rose on Wednesday as financial stocks gained and strong results from companies including WH Smith lifted sentiment ahead of the U.S. Federal Reserve meeting later in the day.
The blue-chip FTSE 100 was up 0.5% and the domestically focussed mid-cap FTSE 250 index advanced 1.1% after logging six straight sessions of losses amid fears of an economic slowdown.
Shares of Asia-focused bank HSBC gained 1.7% to provide the biggest boost to the FTSE 100 index.
WH Smith climbed 5.7% to the top of the FTSE 250 index after the retailer’s quarterly revenue surpassed pre-pandemic levels.
The U.S. Federal Reserve is expected to announce its policy decision at 1800 GMT, with focus on how aggressive it would be on interest rate hikes to combat decades-high inflation. Many fear a drastic action would risk tipping the world into recession.
“The U.S. economy still has a bit more room for manoeuvre and although a downturn is on the horizon, it’s still more of a distant threat compared to in the UK where a recession is looming much larger,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
The Bank of England will likely raise interest rates on Thursday by 25 basis points to 1.25% and stick to those increments in coming meetings despite inflation running close to double-digits, according to a Reuters poll of economists.
Whitbread added 3.4% after the Premier Inn owner reported higher first-quarter sales on a recovery in hotel stays in the UK and Germany.
Bloomsbury Publishing jumped 5.3% after the company reported a 40% jump in annual profit.
(Reporting by Devik Jain in Bengaluru; Editing by Shounak Dasgupta)
The FTSE 100 is a stock market index that represents the 100 largest companies listed on the London Stock Exchange, reflecting their performance.
Interest rates are the cost of borrowing money, expressed as a percentage of the total loan amount, typically set by central banks.
Corporate profit refers to the financial gain a company makes after deducting all its expenses from its total revenue.
An economic slowdown is a period of reduced economic activity, often characterized by declining GDP growth and increased unemployment.
The U.S. Federal Reserve is the central bank of the United States, responsible for setting monetary policy, regulating banks, and maintaining financial stability.
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