FTSE indexes supported by positive corporate update

12:13 pm Thursday, July 18th, 2024

By Purvi Agarwal and Roshan Abraham

(Reuters) -British stocks rose on Thursday after a slew of positive corporate updates, while data showed UK wage growth slowed but not enough to seal expectations of an interest rate cut early next month.

The blue-chip FTSE 100 index closed 0.2% higher.

Frasers Group jumped 9% to the top of the index after the sportswear and apparel retailer reported a 13.1% rise in annual profit and forecast further strong growth in its new financial year.

Schroders climbed almost 5% after Morgan Stanley upgraded the investment manager to “overweight” from “equal weight”.

Broadly, gains on the blue-chip index were driven by energy and consumer staple stocks.

Data showed that UK average weekly earnings excluding bonuses grew by 5.7% in a three-month period ended May, down from 6.0% in the three months to April, but remained close to double the rate that would be consistent with the Bank of England’s 2% inflation target.

Money markets raised the odds of an interest rate cut by the BoE next month to 41.2% from 30%.

“While wages growth is still strong, it is slowly coming down, as is the headline rate of unemployment slowing rising,” Stuart Cole, chief macro economist at Equiti Capital, said. “I think the market is concluding that there is the room to cut rates a bit.”

Investors will look to retail sales data on Friday for fresh clues on the rate outlook.

Britain’s FTSE 250 midcap index rose 0.7% to close at a fresh two-year high.

Dunelm Group jumped 8.5% after the homewares retailer forecast its annual profit would be slightly higher than market consensus.

AJ Bell gained about 6% after the investment platform reported a 20% rise in its third-quarter assets under administration for its Platform business.

Diploma Plc slipped 1.2% after the technical products and services provider kept its full-year outlook unchanged.

(Reporting by Purvi Agarwal and Roshan Abraham in Bengaluru; Editing by Sherry Jacob-Phillips and Andrew Heavens)