Wednesday, October 20

Banks, energy shares lift FTSE 100; Greggs top mid-cap gainer


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London’s FTSE 100 rose on Tuesday, buoyed by heavyweight banks on higher yields, while fast-food chain Greggs jumped after raising its profit forecast.

The blue-chip FTSE 100 index gained 0.6% by 0800 GMT after three straight sessions of losses, with HSBC Holdings, Royal Dutch Shell, BP and Lloyds Group among the top boosts.

The domestically focussed mid-cap index advanced 0.2%. Baker and fast-food chain Greggs provided the biggest support, rising 3.7% after it raised its full-year profit forecast despite supply chain and staffing disruptions.

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“Investors are highly anticipating a spending-driven rally in the upcoming weeks, coupled with higher-than-expected quarterly results as most of the businesses operated with the lowest set of restrictions in the three-month stretch for the first time in the coronavirus pandemic ,” said Kunal Sawhney, chief executive at Kalkine.

A jump in oil prices to three years highs also supported the benchmark index, although it also fueled inflation worries.

The FTSE 100 index has gained nearly 9% so far this year on support from accommodative central bank policies but has traded range-bound around the 7,000 psychological level since August.

The index is around 10% away from its pre-pandemic peaks and its performance below par compared to its European regional and global peers.

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“There’s still massive economic risks mounting in the final months of the year and I think it’s going to be an interesting test, but the markets are only going to pull back so far before it generates interest once more and I think we’re now approaching that point,” said Craig Erlam, senior analyst at Oanda.

Britain’s auto sector dropped 1.4% after preliminary industry data showed new car registrations marked the weakest September for at least 23 years.

Melrose Industries declined 2% after saying the global chip shortage led to a surge in monthly cancellations from its customers in the auto industry.

(Reporting by Bansari Mayur Kamdar; Editing by Subhranshu Sahu and Sriraj Kalluvila)

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