UK stocks advance as U.S. recession fears ebb, Sage Group hits 23-yr high

Shashwat Chauhan and Shristi Achar A
Updated ·2 min read
FILE PHOTO: A man shelters under an umbrella as he walks past the London Stock Exchange

By Shashwat Chauhan and Shristi Achar A

(Reuters) -British equities rose on Wednesday, driven by financial and industrial stocks as robust U.S. data continued to soothe concerns about an economic slowdown, while software company Sage jumped following a brokerage upgrade.

The blue-chip FTSE 100 rose 0.5%, with Sage Group jumping 5.1% to the top of the index.

The stock hit a more than 23-year high after JP Morgan upgraded the stock to "overweight", citing the firm could accelerate its revenue from back-office software automation.

Markets digested hawkish remarks from Bank of England Governor Andrew Bailey, as he said last week's rise in interest rates reflected a resilient economy and unexpectedly persistent inflation.

"We're getting to a situation where inflation is close to getting ingrained and becoming a big issue for the country," said Daniela Hathorn, senior market analyst at Capital.com.

"The comments from central banks are going to be key this week."

Supporting markets globally, economic data from U.S. on Tuesday helped ease worries of an imminent recession in the world's largest economy. [MKTS/GLOB]

Investment banks gained 2%, while construction stocks advanced 2.5%.

Precious metal miners, however, dipped 1% as gold prices slipped. [GOL/]

Meanwhile the domestically focussed FTSE 250 midcap index rose 2%, its biggest one-day percentage gain in nearly five-months.

"The FTSE 250 has been a notable laggard, in terms of inflation data and more broadly, but people are trying to look within those indexes and see if there's things they want to own," said Andrew Jones, Portfolio Manager at Janus Handerson.

However, the FTSE 100 was on track to post a quarterly decline following two straight quarters of gains, pressured by stubborn inflation and high interest rates.

Among other stocks, Revolution Beauty jumped 29% as the exchange lifted a suspension on trading the company's stock after the beauty products retailer re-appointed CEO Bob Holt to the board.

Vodafone added 1.4% after traders said that Exane upgraded the telecommunications company's rating to "neutral".

Ocado was a laggard, down 5% on a media report that Amazon had denied speculation it would make a bid for the British online supermarket.

(Reporting by Shashwat Chauhan and Shristi Achar A in Bengaluru; Editing by Nivedita Bhattacharjee, Dhanya Ann Thoppil and Alex Richardson)