By Shristi Achar A and Sruthi Shankar
(Reuters) -Britain’s main stock indexes closed higher on Thursday, helped by a series of positive updates from blue-chip firms, while data pointed to strong growth for domestic services firms and showed business optimism at a two-year high.
The blue-chip FTSE 100 closed up 0.3%, while the domestically oriented FTSE 250 index added 0.8%.
British insurer Beazley climbed 8.9% to lead gains in the FTSE 100 after it pledged to return around $300 million in capital to shareholders following a strong performance in 2023.
Rolls-Royce jumped 8.3% to its highest in nearly six years as the engineering company said that profit could rise as much as 25% this year, ahead of forecasts, after it smashed targets last year.
Still, the FTSE 100 lagged European and U.S. markets, which rose to a record high after stellar forecast from chip designer Nvidia spurred a rally in global technology stocks.
“It is a mixed bag with regards to the FTSE 100 and is still greatly underperforming its peers. It doesn’t have any technology stocks,” said Axel Rudolph, senior market analyst at IG Group.
“Germany, for example, has SAP. In the UK, we’ve got none and that’s why we have this underperformance, because there is no benefit from this AI frenzy.”
Britain’s economy kept up its early 2024 momentum with a survey showing strong growth for services firms and business optimism at a two-year high, but inflation pressures are likely to keep the Bank of England wary about cutting borrowing costs.
The central bank this month signalled that the time might be approaching for cuts to its benchmark lending rate. But most policymakers are still looking for evidence that inflation pressures will not persist.
Among midcap stocks, Indivior Plc jumped 22.4% after the drugmaker’s annual profit soared 27%. The firm also said it was considering shifting its primary listing to the U.S. by the middle of this year, the latest to join the list of companies leaving London.
Ad firm WPP fell 6.4% after it said its U.S. clients were starting to feel more positive but it would see little or no upside in the first half of the year due to the loss of some creative accounts.
(Reporting by Shristi Achar A in Bengaluru; Editing by Savio D’Souza, Dhanya Ann Thoppil and Tomasz Janowski)
