Commodity stocks boost FTSE 100, Mulberry soars on strong earnings
By Bansari Mayur Kamdar
(Reuters) – UK’s FTSE 100 rose for a third day on Wednesday, led by energy majors after oil prices gained, while leather bag company Mulberry jumped on strong earnings as demand for its luxury products returned to pre-pandemic levels.
The commodity-heavy FTSE 100 climbed 0.2% after hitting one-week highs earlier in the session, while the domestically focussed mid-cap index was flat.
BP and Royal Dutch Shell rose more than 1% each with crude prices inching up as investors questioned the effectiveness of a U.S.-led release of oil from strategic reserves. [O/R]
Miners added 1.0%, supported by higher copper prices after China’s latest announcement to relax its fiscal policy and support the debt-laden property sector eased some concerns about Chinese demand. [MET/L]
The FTSE 100 index has added 13.1% this year, but continues to underperform its European peers with supply chain worries and inflationary pressures capping its gains.
“The valuations on UK stocks continue to be very cheap relative to both global and US markets,” said Oliver Blackbourn, portfolio manager at Janus Henderson Investors.
“It’s the ESG factor. People can see the inflationary benefits of owning materials and energy stocks and if you’re worried about higher interest rates, UK has a lot of financials, but that is not something you want from an ESG perspective.”
Mulberry soared 25%, as per prices on Google Finance, after reporting that demand for its luxury products was back at pre-pandemic levels with sales in the UK and Asia powering a 34% surge in first-half revenue.
Among decliners, IQE Plc, which makes semiconductor wafers for chips, slumped 16.8% after it forecast lower annual profit margin and revenue.
Asset manager Brewin Dolphin slid 5.3% after warning of market volatility ahead, as government support measures unwind and consumer demand falls back into normal levels.
Genetics company Genus sank 14% after the company cut its profit guidance on downturn in China.
(Reporting by Bansari Mayur Kamdar in Bengaluru; editing by Uttaresh.V and Shinjini Ganguli)