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FTSE 100 sees best day in two-months on energy boost; JD Sports shines

·2-min read
FILE PHOTO: A man shelters under an umbrella as he walks past the London Stock Exchange

By Amal S

(Reuters) -London's FTSE 100 ended higher on Thursday, marking its best session in nearly two months, as gains in energy stocks and positive corporate updates helped investors look past concerns over rising COVID-19 infections in the UK.

The FTSE 100 climbed 1.25%, starting the second half of the year on a strong note, with heavyweight energy stocks and bank stocks leading the gains.

JD Sports Fashion gained 5.4% and was the index's top gainer, after Britain's biggest sportswear retailer said it will split long-time boss Peter Cowgill's role as executive chairman and recruit a chief executive over the next year.

Meanwhile, food and clothing retailer Associated British Foods Plc rose 4.8% to post its best session in over four months, after third-quarter sales at its Primark fashion stores, which reopened after COVID-19 lockdowns, came in ahead of expectations in all markets.

The FTSE 100 has gained 10.3% so far this year, helped by support from cheap interest rates and government stimulus. However, it has largely underperformed the wider European market as a recent jump in coronavirus cases raised concerns about the pace of economic recovery.

However, Bank of England Governor Andrew Bailey said it was important not to over-react to a rise in inflation that was likely to prove temporary during Britain's economic recovery from the COVID-19 crisis.

"Investors have clearly accepted the fact that these inflation rates are being perceived as temporary. However, what they don't fully appreciate is that inflation is actually coming in 2022, the actual inflation not the rise in prices as the results of opening up of economy," said Andrea Cicione, head of strategy at TS Lombard.

Travel stocks gained 2.6%, as Prime Minister Boris Johnson said he was confident Britons fully vaccinated against COVID-19 would be able to travel abroad this year.

The domestically focussed mid-cap index added 1.1%.

Among stocks, Royal Dutch Shell gained 2.9% on plans to leave Aera, its California-based oil and gas-producing joint venture with Exxon Mobil Corp, four people familiar with the talks told Reuters.

(Reporting by Shashank Nayar and Amal S in Bengaluru; Editing by Subhranshu Sahu and Jonathan Oatis)

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