By Johann M Cherian and Bansari Mayur Kamdar
(Reuters) -UK’s benchmark FTSE 100 index rose on Thursday following a steep selloff this week, led by gains in banking and mining stocks, while oil major Shell ticked up after naming renewables boss Wael Sawan as its new chief executive officer.
The blue-chip FTSE 100 rose 0.6% after two sessions of sharp losses after hot U.S. inflation reading raised bets for more aggressive monetary policy tightening in the world’s largest economy.
Traders see a 70% chance of a 75 basis point interest rate hike to 2.5% by the Bank of England on Sept. 22. [IRPR]
Banks gained 1.2% in early trade.
“We have seen some calm come back into the markets and at the moment, investors seem to be taking the view that perhaps the sell off earlier in the week was overdone,” said David Jones, chief market strategist at Capital.com.
“There is picking up of blue chips because investors see them as being cheap down there after the falls of the last couple of days.”
Mining stocks advanced 1.0%, as worries about supply disruptions due to Europe’s ongoing power crisis kept metal prices elevated. [MET/L]
The more domestically oriented FTSE 250 gained 0.5%.
Shell rose 0.7% after the oil and gas behemoth named Wael Sawan, its head of integrated gas and renewables division, as the new CEO to replace Ben van Beurden, who will step down at this year end.
Homebuilders rebounded 2.2% after losing over 3% each in the last two sessions, as the sector braces for a tough market amid rising mortgage rates and a worsening cost-of-living crisis.
E-commerce group THG said it expects annual core earnings to fall short of analysts’ expectations on higher commodity prices, sending its shares down 19.3% to hit a record low.
(Reporting by Johann M Cherian and Bansari Mayur Kamdar in Bengaluru; Editing by Sriraj Kalluvila and Rashmi Aich)
