UK’s blue-chip index held near one-month highs on Wednesday, as strong forecasts from heavyweights Reckitt Benckiser and Lloyds Banking Group overshadowed concerns over a slowing economy and soaring inflation.
The FTSE 100 index gained 0.4% and the domestically focussed midcap 250 edged 0.3% higher. Both the indexes looked set to end the month with strong gains.
Shares of Reckitt Benckiser climbed 4.9% to one-year highs as the maker of Dettol and Lysol cleaning products raised its full-year revenue forecast after steep price hikes helped it beat second-quarter sales expectations.
Lloyds Banking Group rose 3.8% after it raised its dividend and full-year profitability forecast as rising interest rates outpace modest growth in provisions for troubled loans.
Meanwhile, better-than-expected results from U.S. tech giants Microsoft and Alphabet looked set to boost Wall Street, with investors bracing for a big interest rate hike from the Federal Reserve later in the day.
“With so many moving parts to consider, we expect markets to remain volatile after the FOMC meeting,” Mark Haefele, chief investment officer of UBS Global Wealth Management wrote in a note.
“The stock market is likely to remain range-bound until the Fed pivots, or we get a reacceleration in business activity. We continue to prefer value over growth in equities, especially energy and the UK market.”
Worries about aggressive monetary policy tightening and the energy crisis in Europe have raised fears of a potential recession. However, resilient defensive sectors such as healthcare and consumer staples and a weakening pound have aided the FTSE 100 this year.
Data released earlier showed shops and supermarkets in Britain increased prices by 4.4% in the 12 months to July, the largest rise since these records began in 2005, reflecting a jump in food and transport costs.
UK-listed shares of Rio Tinto slipped 2.9% after the global miner reported a 29% drop in first-half profit and more than halved its dividend.
Wizz Air jumped 6.4% after the low-cost airline said it expected to deliver a material operating profit as revenue and pricing momentum continued to improve. (Reporting by Sruthi Shankar in Bengaluru; Editing by Vinay Dwivedi and Subhranshu Sahu)
Financial Post Top Stories
Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.
By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300