London Report: FTSE rebound rally spurred by corporate data
THE UK’S top share index rose yesterday, bouncing off of a six-week closing low, after Kingfisher and EasyJet posted updates raising optimism about the outlook for corporate earnings.
Home improvements retailer Kingfisher jumped six per cent as it said it would return about £200m to shareholders in the current year, after meeting forecasts with a 4.1 per cent rise in 2013-14 profit.
Kingfisher was followed closely on the FTSE 100 leaderboard by EasyJet.
The budget airline upgraded its first-half outlook by 25 per cent, helped by tight cost control and the popularity of its allocated seating programme, sending its shares 3.7 per cent higher.
Plumbing supplies group Wolseley also gained after its corporate update, rising 3.3 per cent as strength in its US, UK and Nordic operations lifted its profit.
“Most of the figures out today seem to be broadly positive, with Wolseley, EasyJet and Kingfisher all reading pretty well. There’s a raft of good corporate figures which point to a good economic backdrop,” Joe Rundle, head of trading at ETX Capital, said.
They helped the FTSE 100 index advance 84.50 points, or 1.3 per cent, to 6,604.89 points.
Only five stocks on the index were in negative territory.
Cruise operator Carnival fell 4.6 percent as it forecast a full-year profit below analysts’ estimates.
And Royal Mail Group shed 3.2 per cent after announcing 1,300 job cuts, with traders also highlighting light letter volumes.
“Royal Mail will be all over the headlines for the wrong reasons tomorrow [but] have made what I think is the right move in the longer term,” Rundle said.
Market gains lifted the FTSE away from its lowest close since 5 February, although it remained around four per cent shy of its 2014 peak hit in late January.
The stock market has suffered from concerns about developments in Crimea, although Russia and the West sought to draw a provisional line under the Ukraine crisis yesterday with Moscow saying it was keen to maintain contact with G8 partners.
Signs that China’s growth is slowing have also dampened market sentiment, particularly mining stocks, but these rebounded yesterday on speculation that China will act to support its economy after a survey showed manufacturing contracted in the first quarter.