By Bansari Mayur Kamdar (Reuters) – UK’s FTSE 100 started the holiday-shortened week lower on Tuesday, as a strong sterling weighed on export-oriented stocks and offset upbeat results from oil major BP. After a bank holiday on Monday, the blue-chip index edged 0.2% lower, while the domestically focussed mid-cap index slipped 0.1%. The pound climbed […]
By Bansari Mayur Kamdar
(Reuters) – UK’s FTSE 100 started the holiday-shortened week lower on Tuesday, as a strong sterling weighed on export-oriented stocks and offset upbeat results from oil major BP.
After a bank holiday on Monday, the blue-chip index edged 0.2% lower, while the domestically focussed mid-cap index slipped 0.1%.
The pound climbed 0.4%, weighing on export-heavy companies such as British American Tobacco and Dove soap maker Unilever, down 1.5% each.
Banking stocks rose 1.1% as long-term yields climbed ahead of the Bank of England meeting this week where it is expected to raise rates for the fourth time in a row.
“I expect a lot of choppiness. The upside is challenging if you look at the way price action has been going,” said Michael Hewson, chief market analyst at CMC Markets UK.
“Much will depend on not only what the Fed does tomorrow but also on its guidance, balance sheet reduction and how fast it goes there, obviously the Bank of England on Thursday and the non farm payrolls data on Friday. Looking at the longer term, we’re still in a downtrend for equity markets.”
BP Plc gained 3.2% as the oil major boosted its share buyback programme after net profit soared to its highest in more than a decade on strong oil and gas trading results.
UK’s benchmark index has outperformed its pan-European peers so far this year, helped by heavyweight commodity stocks amid the geopolitical uncertainty, and strength in financials in a higher-interest-rate environment.
Miners fell 1.3%, tracking copper and aluminium prices lower, as COVID-19 restrictions in top consumer China and the prospect of aggressive U.S. rate hikes fuelled worries about weaker global growth. [MET/L]
Elsewhere, HSBC Holdings gained 0.7% after its largest shareholder, Chinese insurance giant Ping An, urged a break-up of the bank in a bid to improve returns.
(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Sriraj Kalluvila and Sherry Jacob-Phillips)
