UK's FTSE 100 rises on commodity stocks rally, Compass earnings boost

UK's FTSE 100 rose on Wednesday as commodity stocks jumped and Compass Group posted a strong earnings report, with investors eyeing crucial U.S. inflation data that will determine Federal Reserve's monetary policy.

UK's FTSE 100 rose on Wednesday as commodity stocks jumped and Compass Group posted a strong earnings report, with investors eyeing crucial U.S. inflation data that will determine Federal Reserve's monetary policy. The blue-chip FTSE 100 gained 0.8% in morning trade, while the domestically focussed mid-cap index advanced 0.4%.

Miners climbed 2.9% as metal prices rose on signs of lower domestic COVID-19 infections in China. Oil majors Shell and BP rose 1.7% each tracking a recovery in crude prices on supply concerns as the European Union worked on gaining support for a ban on Russian oil.

Compass Group jumped 9.7% after the catering company raised its annual revenue forecast and announced a 500 million pound ($616.65 million) share buyback following a strong first half. "A lot of corporates so far have been pretty successful in passing on the higher costs to consumers and we've seen UK stocks being relatively attractive because they are relatively cheap and you're still earning a decent return," said Stuart Cole, ahead macroeconomist at Equity Capital.

"However, if you look at the BRC (British Retail Consortium) figures this week they are showing that consumers are starting to curtail their spending as the cost of living crisis bites and real income is severely eroded." An economic think-tank said Britain is on course to enter a technical recession in the second half of this year and faces a big hit to living standards from surging prices.

Nevertheless, Britain's FTSE 100 has outperformed its pan-European peers so far this year, helped by a jump in commodity stocks due to a surge in metal and oil prices amid ongoing geopolitical tensions. In the wake of the 50-basis-point interest rate hike by an increasingly hawkish Federal Reserve, global markets have gyrated wildly ahead of the U.S. inflation data at 1230 GMT, which will be closely parsed for signs that inflation is peaking.

Among other individual shares, TP ICAP gained 3.7% as the inter-dealer broker said its first-quarter revenue rose 14% as heightened market volatility spurred global trading opportunities.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)