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Recovery optimism buoys London stocks; energy firm SSE jumps

06/17/2020 | 09:54am

By Susan Mathew

London's FTSE 100 rose for a second straight day on Wednesday as a series of upbeat corporate earnings bolstered hopes of an economic recovery, but the index ended with a fraction of the session's gains as fears of a second wave of COVID-19 persisted.

The blue-chip index gained as much as 1.1% during the session but as Wall Street struggled to hold gains amid rising numbers of cases in the United States, the FTSE pared gains to close up 0.2%. [.N]

Declining oil prices weighed on energy stocks <.FTNMX0530>, while banks <.FTNMX8350> and insurers <.FTNMX8570> also fell.[O/R]

"The more intensive outbreak in the second wave seems to have the market a little bit nervous at the moment," said Michael Baker, analyst at ETX Capital. "We are seeing a lot of reactive trading rather than people positioning themselves for the longer term."

Topping the FTSE 100, renewable power generator SSE Plc surged 8.8% to its highest in three months after beating annual profit estimates.

Taking the mid-cap FTSE 250 0.7% higher, home improvement group Kingfisher climbed 6.4% on reporting a jump in quarterly underlying sales.

Online fashion group Boohoo surged 5.5% as it forecast annual results ahead of market expectations.

"Any sort of upswings in the market are going to be based on earnings performance of companies because a majority of the macro-related developments are already factored in," said Andrea Cicione, head of strategy at TS Lombard.

UK stock markets have rebounded sharply from a coronavirus-driven crash in March, with the FTSE 100 up about 27% since then, as investors bet on more global stimulus and an easing of lockdowns to revive business activity.

Data on Wednesday showed British inflation hit a four-year low in May, leaving the Bank of England free to ramp up its stimulus programme again.

Domino's Pizza Group slumped 6% after saying its first-half core earnings would be hit by additional costs.

Graphic: BooHoo versus M&S -

(Reporting by Susan Mathew, Sagarika Jaisinghani and Shashank Nayar in Bengaluru; editing by Uttaresh.V and Giles Elgood)

Thomson Reuters 2020
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