Author of the article:
Reuters
Sruthi Shankar and Shashwat Chauhan
Published Feb 08, 2023 • 2 minute read
Britain’s blue-chip FTSE 100 index briefly hit a record high on Wednesday, boosted by gains in oil major BP, while investors drew comfort from less hawkish than feared remarks by Federal Reserve Chair Jerome Powell.
The exporter-heavy FTSE 100 rose 0.3% at close after hitting an all-time high of 7,934.30 in intraday trading, surpassing its previous peak of 7,906.58 hit last week. The midcap FTSE 250 index climbed 0.6%.
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Shares of BP rose 3.3% to a more than three-year high, extending gains after the British energy giant on Tuesday reported record profit for 2022.
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Drugmaker AstraZeneca climbed 1.6% ahead of its quarterly results on Thursday.
Equities rallied after Powell said on Tuesday 2023 should be a year of “significant declines in inflation” even as he acknowledged that rates may need to move higher than expected if economic strength threatens the Fed’s progress in lowering inflation.
“He (Powell) didn’t put much weight on the argument that inflation has peaked,” said Stuart Cole, head macro economist at Equiti Capital.
“That gave the market some confidence that the FOMC is on board and thinking that the worst of the inflation forces have now gone.”
Back home, investors will keep a close eye on the UK gross domestic product (GDP) data due to be published on Friday, with the preliminary reading expected to show the British economy contracted 0.3% last December, but likely avoided a technical recession in the fourth quarter.
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Meanwhile, the National Institute for Economic and Social Research (NIESR) cut its forecast for UK GDP growth this year to 0.2% from 0.7%, saying Britain will dodge recession in 2023 but its people will face the after-effects of a severe fall in living standards.
Smurfit Kappa fell 3.3% after the packaging giant said box volumes were down less than 2% in 2022 against a strong prior year, and that Germany and the UK markets performed below expectations.
Peers DS Smith and Mondi lost more than 2% each. (Reporting by Sruthi Shankar and Shashwat Chauhan in Bengaluru; Editing by Savio D’Souza, Sherry Jacob-Phillips and Emelia Sithole-Matarise)
