Britain's FTSE rises as oil rally boosts index; Ocado drops 5%

Capping gains among UK's main indexes, Ocado fell after the grocer announced plans to boost its liquidity and raise 575 million pounds ($704.2 million) through a share placement. DS Smith edged 0.8% higher after the cardboard maker posted strong annual numbers.


Reuters | London | Updated: 21-06-2022 14:29 IST | Created: 21-06-2022 14:16 IST
Britain's FTSE rises as oil rally boosts index; Ocado drops 5%
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London's FTSE 100 index climbed on Tuesday, as a rally in crude prices saw energy stocks surge, while shares of Ocado plunged 5% after the online supermarket announced plans to boost its liquidity by more than $1 billion.

The blue-chip index firmed 0.6%, led by energy stocks, as oil prices extended their climb amid tight supplies of crude and fuel products. The domestically focussed mid-cap FTSE 250 index advanced 0.7%, with Telecom Plus jumping 2.3% after the company posted a strong annual profit.

The gains amount to a 'relief rally' as concerns of a recession linger on, said David Madden, market analyst at Equity Capital. Investors also await UK consumer price data for May due on Wednesday, after the inflation rate in April was seen surging to a 40-year high.

CPI will take time to cool down, as there are a lot of reasons inflation is high, including costs of transportation, said Madden. Britain's biggest rail strike in 30 years kicked off on Tuesday, as tens of thousands of staff walked out in a dispute over pay and jobs that could pave the way for widespread industrial action across the economy in the coming months.

Transport operators including FirstGroup, Go-Ahead Group, and National Express slipped between 0.5% and 1% in early trade. Central banks around the world are looking to raise interest rates aggressively to tame soaring inflation, a sentiment underscored by the Bank of England's hike to 1.25% on June 16.

Ever since, banking stocks, which tend to benefit from a higher interest-rate environment, have gained nearly 5%. Capping gains among UK's main indexes, Ocado fell after the grocer announced plans to boost its liquidity and raise 575 million pounds ($704.2 million) through a share placement.

DS Smith edged 0.8% higher after the cardboard maker posted strong annual numbers.

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

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