Oil, defense stocks support FTSE 100 despite inflation shock


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The FTSE 100 rose on Wednesday, lifted by energy and defense stocks, even as hotter-than-expected inflation data highlighted a severe cost-of-living crisis that has put the British economy at the risk of a sharp recession.

The exporter-heavy FTSE 100 inched 0.3% higher, with oil & gas stocks rising 1.2% on the back of higher crude prices.

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UK’s aerospace and defense index jumped 2.7% following a blast in Poland at a grain facility near the Ukrainian border. Russia denied it was responsible.

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U.S. President Joe Biden said the United States and its NATO allies were investigating the blast but early information suggested it may not have been caused by a missile fired from Russia.

Surging household energy bills and food prices pushed British inflation to a new 41-year high in October, according to data published a day before finance minister Jeremy Hunt is likely to announce tax hikes and spending cuts to control price growth.

Consumer prices rose by 11.1% in annual terms last month, while economists polled by Reuters had forecast the inflation rate would rise to 10.7%.

The pound was flat after hitting a three-month high in the previous session, while the domestically focussed FTSE 250 index slipped 0.3%.

Among individual stocks, Deliveroo Plc rose 1.2% after the food delivery company said it ended its operations in Australia.

Beazley Plc fell 5.4% after the insurer said it planned to raise 385 million pounds ($457 million) by selling new shares in the business, equivalent to a 10% stake.

Shares of Carnival Plc dropped 6.7% after the cruise operator said it was planning $1 billion convertible debt deal. (Reporting by Shashwat Chauhan and Sruthi Shankar in Bengaluru; Editing by Sherry Jacob-Phillips)


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