By Devik Jain and Sruthi Shankar
(Reuters) - Britain's top equity index rose on Wednesday as positive corporate updates helped calm the mood after a sharp sell-off in the previous session due to plunging oil prices.
The blue-chip FTSE 100 index (FTSE) rose 1.5%, aided by a recovery in banks stocks and miners, while the domestically oriented midcap shares (FTMC) rose 0.7%.
Shares of Irish building group CRH (L:CRH) (I:CRH) jumped 7% after it said stimulus actions could mitigate the hit from the coronavirus outbreak and that it would go ahead with a 15% rise in 2019 dividend, pending shareholder approval.
Global markets took a breather on Wednesday after this week's wild swings in oil prices even as Brent crude (LCOc1) - Europe's oil benchmark - tumbled to its lowest since 1999.
"Oil is a widely used commodity that could bring worries of deflation. That would be an issue not just for energy companies, we could see a fall in spending," said David Madden, market analyst at CMC Markets in London.
Data showed Britain's inflation rate dropped in March when oil prices tumbled and the health crisis escalated, with a fall in clothing and footwear prices indicating how cautious shoppers were turning.
However, online fashion retailer Boohoo (L:BOOH) rose 4.7% after it said its performance recovered in recent weeks even as sales growth dipped in the middle of March due to lockdown measures.
Power producer Drax Group (L:DRX) surged 8% as it forecast 2020 core profit in line with market expectations despite the hit from the pandemic and said it expects to pay 2019 dividend.
Specialist insurer Beazley Plc (L:BEZG) fell 3.9% after it estimated coronavirus-related claims at $170 million and posted a quarterly loss due to sell-off in financial markets.
The FTSE 100 has recovered about 16% from mid-March lows as central banks and governments took unprecedented steps to shield the global economy.
However, analysts are sceptical of further gains, with latest Refinitiv forecasts showing companies listed on the pan-European STOXX 600 index (STOXX) to record a 37% decline in earnings in the second quarter. First-quarter profits are expected to decline about 25%.