Published 15:05 IST, March 13th 2024
FTSE 100 inches higher as UK economy shows growth
The positive economic momentum provided some relief to Prime Minister Rishi Sunak ahead of an anticipated election later this year.
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UK economy growth: The FTSE 100, Britain's benchmark stock index, remained near recent highs on Wednesday following news of the UK economy's return to growth at the beginning of 2024. Corporate earnings also contributed to the positive sentiment in the market.
The exporter-heavy FTSE 100 edged up 0.1 per cent, building on its strongest close in over nine months recorded on Tuesday, while the mid-cap FTSE 250 index rose nearly 0.2 per cent.
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Data released indicated that the British gross domestic product expanded by 0.2 per cent month-on-month in January, meeting economists' expectations. This growth was attributed to a resurgence in retailing and house-building activities.
The positive economic momentum provided some relief to Prime Minister Rishi Sunak ahead of an anticipated election later this year, especially as the country had experienced a mild recession in the latter half of 2023.
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Danni Hewson, head of financial analysis at AJ Bell, commented, "Seeing a positive momentum for the UK economy right out of January suggests that recession is firmly in the rearview mirror. That mythical soft landing that we've all been talking about seems to be within reach."
Investors reacted by increasing their expectations of a rate cut in June, although a full adjustment is not anticipated until August.
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In the realm of individual stocks, Metro Bank saw a 0.3 per cent increase following its announcement of a smaller annual loss. This positive outcome was attributed to the bank's cost-cutting initiatives and stabilized outflows towards the end of the year.
Meanwhile, infrastructure firm Balfour Beatty experienced a significant surge of about 7.5 per cent, marking its most substantial one-day gain since August 2022. The company reported better-than-expected full-year revenue and revealed plans for share buybacks.
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Flutter Entertainment Plc also witnessed a rise of 1.6 per cent after receiving an upgrade from JP Morgan to "overweight" from "neutral". Similarly, Man Group shares rose by 4 per cent following an upgrade from BofA Global Research.
However, London-listed shares of Hochschild Mining dipped by 4 per cent following the 2024 production outlook, contrasting with Glencore's 2 per cent climb after being upgraded by Deutsche Bank to "buy" from "hold".
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(With Reuters inputs.)
15:05 IST, March 13th 2024