Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

FTSE 100 jumps on mining boost, Burberry's strong forecast

Published 19/01/2022, 08:20
Updated 19/01/2022, 17:05
© Reuters. FILE PHOTO: A man shelters under an umbrella as he walks past the London Stock Exchange in London, Britain, August 24, 2015. REUTERS/Suzanne Plunkett

© Reuters. FILE PHOTO: A man shelters under an umbrella as he walks past the London Stock Exchange in London, Britain, August 24, 2015. REUTERS/Suzanne Plunkett

By Shashank Nayar

(Reuters) -London's FTSE 100 ended higher on Wednesday, aided by gains in miners and consumer staples, with strong profit forecasts from luxury brand Burberry and education group Pearson (LON:PSON) providing a further fillip to sentiment.

After falling as much as 0.5%%, the blue-chip FTSE 100 index reversed course to end 0.4% higher, with major miners and consumer companies such as Diageo (LON:DGE) and Unilever (LON:ULVR) among top gainers.

British consumer price inflation rose more than expected to 5.4% in December, official data showed, adding pressure on the Bank of England (BoE) to raise interest rates again next month.

"The view that the current high readings are transitory is starting to sound a bit hollow," said Alan Custis, managing director at Lazard Asset Management. "We would expect inflation to peak nearer 7% in 2022, which will keep the pressure on the BoE to continue increasing interest rates."

Signs of inflationary pressures and labour market strength drove investors to ramp up rate hike bets, pushing the UK's benchmark bond yield to its highest since March 2019, while shorter-duration yield touched October 2018 highs.

Meanwhile, BoE Governor Andrew Bailey said that he was concerned inflation pressures might prove longer-lasting than previously forecast, citing surging energy costs and signs that cost pressures are feeding into wage demands.

Burberry gained 6.3% after the luxury brand said its annual profit would beat market expectations as the company's full-price sales accelerated in the third quarter.

Pearson gained 4.4% after it raised its forecast for full-year adjusted operating profit in a boost to management efforts to restructure the business.

© Reuters. FILE PHOTO: A man shelters under an umbrella as he walks past the London Stock Exchange in London, Britain, August 24, 2015. REUTERS/Suzanne Plunkett

Meanwhile, Unilever PLC gained 4.5% after the Dove soap maker said on Wednesday it would not increase its 50-billion-pound ($68 billion) proposal to buy GSK's consumer healthcare business.

The domestically focussed mid-cap index was 0.0 flat, with WH Smith (LON:SMWH) Plc jumping 7.1% on expectations of a resumption in the recovery of its travel markets even as the retailer said it was experiencing a "small impact" from the Omicron coronavirus variant.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.