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Britain's FTSE up as energy stocks recover, grocers soar

Tue, 15th Nov 2016 17:14

* FTSE 100 index up 0.6 pct at close

* Energy and supermarket stocks rally

* Miners come under selling pressure (Recasts, adds detail and quotes, updates with closing prices)

By Kit Rees and Atul Prakash

LONDON, Nov 15 (Reuters) - Britain's top share indexadvanced for a second straight day on Tuesday, with energyshares tracking a rally in crude oil while supermarket stocksgained after encouraging industry data.

Retail stocks were among the top risers, with Britain'sbiggest supermarket chain, Tesco, jumping 5.4 percentafter data from Kantar Worldpanel showed its sales grew at thefastest rate in three years in its most recent trading period.

Shares in Morrisons and Sainsbury's rose4.4 percent and 2.2 percent respectively.

"We are encouraged by the (12-week) market performance, themomentum of recent events, which may bode well for 2016Christmas trade, and the overall rationality of the market,"analysts at Shore Capital Markets said in a note, adding thatthey had an "overweight" rating on UK supermarkets.

Budget airline easyJet was another top gainer,climbing 5.3 percent after an update.

Though the airline reported a 28 percent drop in its pretaxprofit, its first decline since 2009, analysts said that it camein at the upper end of a range given in October.

"With profits thankfully at the higher end of guidance,easyJet's main news today is about passenger yields and theoutlook," Ken Odeluga, market analyst at City Index, said in anote. He said he agreed with the market view that easyJet'sshares, which are down around 37 percent this year, have reachedbottom.

Pharma stock Hikma also gained ground, rising morethan 6 percent, the biggest gain on the FTSE 100. Morgan Stanleyupgraded the shares to "overweight" late on Monday, citing anencouraging pipeline as well as a compelling valuation.

The blue-chip FTSE 100 index closed 0.6 percenthigher at 6,792.74 points.

The UK mid-cap index rose 0.9 percent, led higher bya rise in oil stocks Tullow Oil and Amec Foster Wheeler.

Energy shares were the top sector performers, with the UKoil and gas index rising 3 percent. Oil pricesgained around 2 percent on optimism that OPEC will agree laterthis month to cut production to reduce a supply glut.

Shares in BP and Royal Dutch Shell both rosemore than 2.5 percent.

However, mining shares lost ground following a drop inprices of industrial metals as traders cashed in gains afterlast week's dramatic price spikes triggered by Donald Trump'sU.S. presidential election victory.

The UK mining index, which surged more than 10percent last week following Trump's pledge to invest a hugeamount on U.S. infrastructure projects, fell 4.6 percent.

Tuesday's moves halted a recent rotation into mining andfinancial shares from defensive equities with high yields suchas utilities, which slumped in the previous session following arally in bond yields.

British utility stocks rose as euro zone government bondyields dropped across the board after a six-week sell-off.

"Bond markets have soured on the prospect of Trump-ledinflation, although the sell-off seems to have abated somewhatas investors pause for breath," Neil Wilson, analyst at ETXCapital, said.

"Reversals in the last week's moves in stocks and bonds arepossible and we may be seeing the start of this today as goldfirms and bond yields retreat a little. The great bond marketsell-off may have run its course." (Reporting by Kit Rees, editing by Larry King)

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UK shareholder meetings calendar - next 7 days

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Tuesday 23 April 
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Comments and questions to newsroom@alliancenews.com
  
A full 21-day events calendar is provided each day with a subscription to Alliance News UK Professional.
  
Copyright 2024 Alliance News Ltd. All Rights Reserved.

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