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Retail, energy stocks lead London bourse higher

written by Bella Palmer
energy-stocks

Fresh economic insight showed total U.K. retail sales rose 2.1% in December on an annual basis, according to the BRC-KPMG monitor

A bounce for energy prices drove up heavily weighted stocks in the sector, leaving the London bourse higher following Monday’s lacklustre start.

The FTSE 100 index advanced 0.4% to 7,478 on Tuesday, on the heels of a 0.5% drop. The pound was steady at $1.3579.

UK’s market is less exposed to tech stocks and with the sector inherently being more volatile given their nature, taking that away from the FTSE 100 gives it a more stable personality right now, said Stuart Cole, head macro economist at Equiti Capital.

We have the Bank of England and its willingness to further tighten policies following its December hike. There is a sense that monetary normalisation is on the cards, he said.

Fresh economic insight showed total U.K. retail sales rose 2.1% in December on an annual basis and 4.6% higher from two years ago, according to the BRC-KPMG monitor.

Paul Martin, U.K. head of retail at KPMG said there are ‘many macro factors’ outside of retailers’ control that could impact them going forward.

Top priorities for retailers cautiously optimistic for 2022 will include a focus on re-engineering their business models, ensuring they operate resilient supply chains and having a tight grip on their costs, said Martin, in a press release.

Retailers were on the rise, though, with shares of Next up 4.5% and B&M European Value Retail gaining 2%. Primark owner Associated British Foods added 1% and grocer Tesco advanced just over 1%.

A 1.5% gain for energy prices sent shares of Royal Dutch Shell and BP up by 1% each.

Pharmaceutical names were also climbing, with AstraZeneca shares up 1.2% and GlaxoSmithKline stock up 1%. The latter said the U.S. has ordered another 600,000 doses of sotrovimab, an investigational monoclonal antibody for early COVID-19 treatment. GlaxoSmithKline has developed the treatment, shown to be effective against omicron and delta variants, with partner Vir Biotechnology.

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