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FTSE 100 gains as miners, strong earnings support

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By Reuters
FTSE 100 gains on support from miners, strong earnings
FTSE 100 gains on support from miners, strong earnings   -   Copyright  Thomson Reuters 2022

By Shashank Nayar

-London’s FTSE 100 ended higher on Wednesday, led by mining and oil giants following a global rally in risk assets, while a slew of positive earnings updates including a forecast lift from supermarket group Sainsbury’s also aided the mood.

The blue-chip index gained 0.8%, with heavyweight metal miners BHP Group, Glencore, Antofagasta and Anglo American jumping about 3% on hopes of more economic support in China, the world’s top metal consumer. [.SS] [METL/]

Overall, global equities took comfort from less hawkish comments by U.S. Federal Reserve Chairman Jerome Powell on Tuesday after fears about quicker U.S. interest rate rises had dented markets in recent sessions. [MKTS/GLOB]

Sainsbury’s gained 3.1% after it raised its full-year profit forecast by at least 9% following stronger-than-expected food sales over Christmas, even though it fell short of its stellar 2020 festive performance.

“Sainsbury’s is sliding down the value chain to appeal to cost-conscious shoppers,” said Sophie Lund-Yates, an equity analyst at Hargreaves Lansdown.

“It’s a relief to see the group target a more specific market, and this approach could certainly help in an inflationary environment as incomes don’t stretch as far.”

The domestically focused mid-cap index advanced 0.1%, with homeware retailer Dunelm up 5.1% among the top gainers after it said it expected its full-year profit to be “materially ahead” of market expectations.

The FTSE 100 has gained about 1.5% so far this year, outperforming the wider European stock aggregate, which is down 1%. A heavy presence of banking shares, which have surged this year as investors ramp up rate hike expectations, has helped the index’s outperformance.

Among other earnings updates, recruiter PageGroup lifted its full-year profit forecast for the third time in six months, buoyed by a surge in demand for long-term hiring and staff shortages, however its shares ended 0.6% down.

JD Sports Fashion fell 3.3% to give back early gains even as it raised its annual profit forecast ahead of market expectations.