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FTSE 100 snaps four-day losing streak on earnings optimism

FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain

By Shashwat Chauhan and Ankika Biswas

(Reuters) - The UK's FTSE 100 snapped a four-day losing streak on Monday as euphoria around upbeat earnings reports from Associated British Foods and Bunzl helped offset worries about high U.S. interest rates.

The blue-chip FTSE 100 closed 0.7% higher, after logging its worst weekly performance so far this year when Friday's hotter-than-expected U.S. consumer spending data sparked a selloff on both sides of the Atlantic.

However, UK stocks lagged behind their European peers on Monday owing to a firmer pound after British Prime Minister Rishi Sunak announced a deal with the European Union to amend the original Northern Ireland Protocol.


The Irish benchmark stock index also jumped 2%.

On the earnings front, business supplies distributor Bunzl gained 2.5% and hit a six-month high after raising annual dividend and reporting a higher full-year profit.

Primark owner climbed 1.4% and touched a one-year high after the food processing company raised its full-year outlook.

Rolls-Royce topped the FTSE 100 with 6.6% gains and hit an over one-year high, rising for three straight sessions, as Jefferies raised its price target on the jet engine maker's stock following upbeat 2023 profit outlook last week.

"It's natural for traders to want to go bargain hunting after a selloff like Friday’s," said Steve Sosnick, chief strategist at Interactive Brokers.

"UK earnings season fits in the theme that we've seen in a lot of the rest of the world- better than feared."

The FTSE 100 has had a stellar start to 2023, rising 6.5%, boosted by strong earnings and higher commodity prices.

Challenging the gloomy forecasts for the UK economy, a survey showed that 60% of British businesses are optimistic about economic growth in the medium term and their own revenues in the next few years.

Among others, Elixirr International jumped 20.2% following robust full-year outlook, while Dechra Pharmaceuticals slumped 9.2% as the veterinary drugmaker expects full-year profit to be at the lower end of analysts' expectations.

(Reporting by Shashwat Chauhan and Ankika Biswas in Bengaluru; Editing by Savio D'Souza, Dhanya Ann Thoppil and Christina Fincher)