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Cyclical stocks lift UK equities off six-week lows; Wood Group rises

Published 22/08/2023, 08:28
© Reuters. FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville/File Photo
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By Shreyashi Sanyal and Khushi Singh

(Reuters) -Britain's blue-chip FTSE 100 index climbed off six-week lows on Tuesday, powered by gains in beaten-down cyclical sectors, while shares of John Wood Group (LON:WG) advanced after the company raised its annual profit outlook.

The FTSE 100 was up 0.2% while the midcap FTSE 250 index gained 0.7%. Both indexes snapped seven-day losing streaks.

Precious metal miners jumped 2.8%, marking their best day since May 31, as the sector led gains.

Construction and materials, automobiles and parts and travel and leisure indexes also gained between 0.7% to 1.5% in the rally of cyclical sectors.

John Wood Group climbed 4.1% after the oilfield services and engineering firm raised its expectations for annual adjusted core profit.

"It is a relatively light data calendar this week, meaning that there are fewer risks to any rally for a few days, certainly until Friday when (U.S. Federal Reserve Chair Jerome) Powell is scheduled to speak at Jackson Hole," said Stuart Cole, chief macro economist at Equiti Capital.

"The market may simply be taking advantage of these calmer waters."

Meanwhile, shares of the defensive personal care and retail sectors slipped 0.4% and 0.8%, respectively, indicating investors' risk-on mood.

Industrial metal miners rose 1.8% as copper prices were buoyed by firm consumption data in China and more Chinese monetary support measures. [MET/L]

Investor focus will now shift to the Jackson Hole Symposium due later in the week, where major central bankers, including Powell, will share their views on the trajectory of global monetary policy.

© Reuters. FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville/File Photo

Data on Tuesday showed sales growth at British supermarkets slowed in August due to a hit to demand from unseasonably wet weather. Shares of both Marks and Spencer (LON:MKS) and Sainsbury fell over 0.8%.

Britain's largest sportswear retailer JD Sports Fashion led declines on the FTSE 100 as the stock slumped 6.9% after a weak forecast from U.S. peer Dick's Sporting Goods'.

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