Investing
UK shares gain at end of turbulent week but set for weekly fall
Global Banking & Finance Review®
Company
By Devik Jain
(Reuters) – UK stocks rose on Friday, with miner Glencore and media company Future gaining on strong outlook, although worries about sluggish economic growth put the main indexes on course for their third straight week of fall.
The FTSE 100 index was up 0.6% by 0818 GMT in choppy trading. Shares of Glencore jumped 3.4% to the top of index after forecasting more than $3.2 billion in half-year adjusted operating profit for its trading division.
Spirits maker Diageo provided the second-biggest boost to the index with a 2.6% rise.
The domestically focused mid-cap FTSE 250 index advanced 1.2%, powered by a 5.4% surge in shares of Future after the company reaffirmed it is on track to achieve full-year 2022 guidance.
Both the indexes slumped more than 3% on Thursday after a cautious rate hike by Bank of England spurred hopes of bigger increases in next few meetings, as it sees inflation topping 11% and warned that the British economy would shrink in the April-June quarter.
“The more aggressive line by central banks adds to headwinds for both economic growth and equities,” Mark Haefele, chief investment officer at UBS Global Wealth Management said in a note.
“Against this backdrop, we now see less upside for stocks this year, with slowing economic growth weighing on profit growth and higher bond yields depressing valuations.”
For the week, the FTSE 100 is down 3.1% and the FTSE 250 has shed 3.7% as investors grew wary that a coordinated monetary policy tightening by global central banks could stoke a global economic slowdown.
“Rising inflation, interest rates and a rising chance of a recession have all served to turn stomachs in equity-land. Investor confidence can’t have been completely shattered, however, judging by the fact some people were happy to go shopping for bargains after the recent sell-off,” Russ Mould, investment director at AJ Bell said.”
Among other stock moves, Tesco slipped 0.3% after Britain’s biggest retailer said it was seeing early indications of changing customer behaviour due to surging inflationary pressures that had made the market “incredibly challenging”.
(Reporting by Devik Jain in Bengaluru; Editing by Shailesh Kuber)
The FTSE 100 is a stock market index that represents the 100 largest companies listed on the London Stock Exchange, based on market capitalization.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is often measured by the Consumer Price Index (CPI).
A rate hike refers to an increase in interest rates set by a central bank, often aimed at controlling inflation and stabilizing the economy.
The FTSE 250 is a stock market index that includes the 250 largest companies listed on the London Stock Exchange, excluding the FTSE 100 companies.
Economic growth is an increase in the production of goods and services in an economy over a specific period, typically measured by GDP growth.
Explore more articles in the Investing category
