By Sruthi Shankar (Reuters) -Oil and defensive stocks on Friday lifted London’s FTSE 100 index, which was still set for a weekly loss on worries about aggressive interest rate hikes and a sharp slowdown in China’s economy. The blue-chip FTSE 100 added 0.6%, supported by energy giant Shell and British American Tobacco. The domestically focussed […]
By Sruthi Shankar
(Reuters) -Oil and defensive stocks on Friday lifted London’s FTSE 100 index , which was still set for a weekly loss on worries about aggressive interest rate hikes and a sharp slowdown in China’s economy.
The blue-chip FTSE 100 added 0.6%, supported by energy giant Shell and British American Tobacco. The domestically focussed FTSE 250 index gained 1%.
However, sluggish economic growth in China due to widespread COVID-19 lockdowns continued to weigh on sentiment, with Asian stocks hitting a two-year low.
The lockdowns took a toll on London’s luxury brand Burberry, whose first-quarter comparable store sales rose just by 1%. The weakness in its biggest market pushed its shares 5.8% lower.
“Mainland China is acting as a serious drag for the group, which is overshadowing successes elsewhere,” said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.
Both the UK equity benchmarks were poised for weekly losses as investors feared of a big policy move by the U.S. Federal Reserve later this month to curb soaring prices.
Bank of England ( BoE ) Deputy Governor Dave Ramsden said on Thursday interest rates very likely will have to go up further to stop a repeat of the persistent inflation.
Investors were pricing a roughly 83% chance of the BoE announcing a rare half-percentage point hike on Aug. 4.
UK-listed shares of Rio Tinto slipped 2.7% after the global miner warned that labour shortages and soaring inflation would impact its earnings in the second half.
Low-cost carrier EasyJet dropped 1.2% after J.P. Morgan downgraded the stock to “underweight”.
Tonic maker Fevertree fell 24.4% after it lowered its annual profit forecast, citing worsening cost pressures and logistical issues.
Aston Martin’s shares surged 15.3% to the top of the midcap index after the luxury carmaker brought Saudi Arabia’s sovereign wealth fund as its second-largest shareholder and said it was looking to raise 653 million pounds ($771.58 million).
(Reporting by Sruthi Shankar in Bengaluru; Editing by Sherry Jacob-Phillips and Arun Koyyur)
