© 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
By Sruthi Shankar, Pranav Kashyap and Johann M Cherian
(Reuters) -UK’s ended Wednesday higher, clinging on to recent highs after data showed the local economy returned to growth at the start of 2024, while insurance firm Direct Line (LON:) weighed on the midcap index post rejecting a sweetened take over bid.
The exporter-heavy FTSE 100 closed up 0.3%, notching a new nine-month high, while the more domestically focused ended flat.
British gross domestic product grew in January by 0.2% month-on-month, in line with economists’ expectations, boosted by a rebound in retailing and house-building, offering some relief to Prime Minister Rishi Sunak ahead of an election expected this year.
“The economy is starting to turn a corner… we should see growth gradually return to its trend rate over the course of the year, as sentiment continues its uptrend and fiscal and monetary policy loosen through 2024,” said Sanjay Raja, chief UK economists at Deutsche Bank (ETR:).
Investors added to their bets of a rate cut in June, although the first one is not fully priced in until August.
UK’s FTSE indexes have underperformed developed market peers as worries of a slowing economy and uncertainty on the timeline for interest rate cuts dampened risk sentiment.
On the day, Shell (LON:) gained 1.2% after a report said the oil giant is planning to cut at least 20% of jobs in its deals team.
The broader energy sector also advanced 1.4%, tracking an uptick in crude prices. [O/R]
The nonlife insurance sector lost 2.0%, bogged down by a 4.3% drop in Direct Line after it rejected a revised 3.17 billion pound ($4.06 billion) buyout offer from Belgian rival Ageas, repeating that it “significantly undervalued” the home and motor insurer.
Balfour Beatty (LON:) surged about 9.5% after reporting upbeat annual revenue and announced share buyback plans.
Man Group rose 2.4%, with traders pointing to an upgrade from BofA Global Research, while Glencore (LON:) climbed 4.8% after Deutsche Bank upgraded the miner to “buy” from “hold”.
Read the full article here
