London stocks gain on sharp rebound in May retail sales, oil boost

London shares rose on Friday as a sharp rebound in retail sales in May bolstered hopes of a swift economic recovery from a pandemic-driven slump, while energy shares tracked a gain in oil prices. The Bank of England on Thursday expanded its bond-buying plan, as expected, but slowed the pace of the programme, saying it saw some signs of an economic recovery.

London shares rose on Friday as a sharp rebound in retail sales in May bolstered hopes of a swift economic recovery from a pandemic-driven slump, while energy shares tracked a gain in oil prices. The FTSE 100 was up 0.5% and on course to rise for the fourth week in five as optimism around the revival in business activity overshadowed concerns of further lockdowns following a surge in infections in the United States and China.

The mid-cap FTSE 250 added 0.1%, with auto , banking and food and beverage stocks leading gains. Data on Friday showed retail sales volumes surged by a record 12% in May amid an easing in the nationwide shutdown imposed to contain the spread of the novel coronavirus.

"The retail sales numbers show the economy isn't dead, which is giving some confidence to the market," said Andrea Cicione, strategist at TS Lombard. "Investors are now positioning themselves for the upcoming second-quarter numbers and also keeping an eye on any significant jump in coronavirus cases globally."

UK stock markets have joined a global rally following a coronavirus-driven crash in March, with the FTSE 100 now less than 20% below its record high, partly aided by historic stimulus. The Bank of England on Thursday expanded its bond-buying plan, as expected, but slowed the pace of the programme, saying it saw some signs of an economic recovery. A separate survey on Friday showed consumer sentiment recorded its biggest improvement in nearly four years in June.

Among individual stocks, BP Plc and Royal Dutch Shell Plc were among the biggest boosts to the FTSE 100 as oil prices rose on a pledge by OPEC and allies to meet their supply cut commitments. But engineering and consultancy company Wood Group Plc fell 3.6% after saying it expected first-half core earnings to drop 19%.

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