Banks and energy stocks lift FTSE 100; IAG jumps on recovery hopes
London’s FTSE 100 ended higher on Friday, led by banks and energy stocks, while British Airways parent company IAG jumped on recovery hopes despite warning of a big loss in 2021.
The FTSE 100 blue chip gained 0.3% to record its highest close since February 2020, with oil majors BP and Royal Dutch Shell up 1.7% and 1.5% as crude prices prolong their earnings for the second session. The pound continued its decline, down 0.1%, after posting its worst day in more than a year on Thursday, further boosting the FTSE 100 index, a heavy index of export and income-generating companies in dollars like British American Tobacco, Unilever and Diageo.
“Consumer stocks were inspired by the MPC’s assessment that the economy is on a positive trajectory,” said Kunal Sawhney, CEO of Kalkine Media. “Despite the downward revision of the GDP forecast by one percentage point, demand is expected to hold, which will help consumer stocks continue the momentum gained recently,” he added.
The banking sector rose 1.1%, rebounding from its worst session in more than a month in the previous session, despite UK 10-year government bond yields registering a month-low after a move surprise the Bank of England Thursday to suspend on the interest rate hike. The FTSE 100 rose 1% this week, underperforming the 2% increase in the UK mid-cap index and a weekly gain of 1.8% across broad European equities, bogged down by the volatility of commodity prices and the heavy losses in the banking sector on Thursday after the BoE’s tariff decision.
The domestically-focused FTSE 250 index rose 0.4%, closing at a month high, helped by consumer discretionary stocks. IAG gained 6.1% after the owner of British Airways said he was “very optimistic” about reopening transatlantic travel and planned to increase capacity on those routes next year, after reporting a big loss in 2021.
Other UK travel titles like Wizz Air and Easyjet gained 2.8% and 6% respectively. British group THG gained 3.9% after investment management firm Blackrock on Thursday unveiled its 5.37% stake in the mainstream online brand company.
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