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Miners, strong earnings drive FTSE 100 higher; BoE meeting now in focus

Miners drive FTSE 100 higher, Smurfit Kappa climbs to top as profit jumps
Miners drive FTSE 100 higher, Smurfit Kappa climbs to top as profit jumps   -   Copyright  Thomson Reuters 2022
By Reuters

By Devik Jain

-London’s FTSE 100 rose on Friday, driven by miners and strong quarterly earnings, with investors now focused on the Bank of England meeting next week amid concerns over the soaring cost of living.

The blue-chip index closed 0.5% higher, lifted by a 1.2% rise in shares of Dove soap maker Unilever and advances in miners.

The FTSE 100 has risen nearly 0.4% this month, helped by gains in energy majors, defensive consumer staples and pharmaceutical stocks such as AstraZeneca.

The Ukraine war, China’s COVID lockdowns and surging inflation have weighed on the outlook for the global economy, sparking volatility ahead of a widely expected move by the British central bank to raise interest rates for a fourth straight meeting on May 5.

Financial markets have fully priced in a quarter-point rise in Bank Rate to 1.0%, its highest since 2009, and investors await what the Bank of England will signal about its next moves as it seeks to tackle surging prices.

“The coming months will see the Bank of England performing a high wire balancing act between retaining credibility on inflation-targeting on the one hand and nudging the economy towards recession on the other,” said Laith Khalaf, head of investment analysis at AJ Bell.

Smurfit Kappa jumped 4.3% after the boxmaker’s revenue and core profit both surged 33% year-on-year in the first quarter.

Pearson added 1.9% as the education group reiterated its full-year profit forecast after reporting underlying sales growth of 7% in the first quarter.

The domestically focused mid-cap FTSE 250 index advanced 0.4%, however, recorded a monthly dip of 2%.

Reckitt Benckiser Group rose 0.5% as it beat quarterly sales expectations, having increased prices to offset soaring raw material costs and flat volumes.

AO World Plc tumbled 13.0%, after the electricals retailer warned of a hit to profit in the near term due to inflationary pressures and supply chain woes.