FTSE rises after dust settles on inflation stir

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European markets were in fine mood on Thursday after a worse-than-expected UK inflation reading caused a stir among investors in the top global indices the day before.

Trading was more subdued in the US, but Europe’s markets recovered and gains among oil stocks helped offset losses from insurance giants on the FTSE 100.

The index was trading higher by 26.1 points, or 0.35%, at 7,541.85 by the end of the day.

Michael Hewson, chief market analyst at CMC Markets UK, said: “It’s been a disjointed session for European markets today.

“We’ve seen a modest drift higher largely due to the recovery of US markets off their intraday lows from yesterday, which has helped add some support for prices.

“The FTSE 100 has been helped by a resilient oil and gas sector, with a rebound in oil prices helping to underpin the broader index, led by BP and Shell.”

But a host of companies going ex-dividend – trading without the value of their next dividend payment – dragged down the index, Mr Hewson added.

Abrdn, Aviva, M&G and HSBC were among the companies that started trading ex-dividend on London’s top stock exchange.

Elsewhere in Europe, The German Dax also lifted after sliding on Wednesday, and finished the day up 0.5%. The French Dax gained the same amount.

The US’s top indices were trading higher than the previous day. A slowdown in jobless claims coupled with a modest rebound in manufacturing seen in the Philadelphia Fed business survey helped lift the sombre mood.

The S&P 500 was up 0.2% when European markets closed, while the Dow Jones had dropped 0.1%.

In company news, there was a moderate rebound in the share price of AO World despite bosses reporting the company had fallen to an annual loss.

The online electricals retailer posted a £37 million pre-tax loss for the year to March 31, a substantial drop from a £20 million profit the previous year. Shares in the company have tumbled more than 80% in the past year following several profit warnings.

But investors were placated by the retailer’s promise to shake up business in the year ahead and focus on returning to profit growth. Shares were up 2p to 42.16p when markets closed.

Online furniture retailer Made.com saw its shares tread water after confirming it was considering a potential equity capital raise.

The announcement came after Sky News reported on Wednesday that the business could raise up to £50 million in a sale of shares to boost finances.

The firm has seen its market cap plunge by around 95% since it first listed on the London Stock Exchange. Shares closed up just 0.02p at 9.9p.

In gambling news, Mecca Bingo owner Rank Group warned that inflation could affect consumer demand in the coming months and hit the firm’s profitability.

The casino and bingo hall company told shareholders it is braced for a “tougher autumn”, despite swinging to a pre-tax profit of £74.3 million for the year to June 30 and bouncing back from previous losses.

Shares in the company dipped slightly on Wednesday and finished the day down 3p at 85p.

The biggest risers on the FTSE 100 were Antofagasta, up 29.5p to 1,169.5p, BP, up 11.1p to 442p, Prudential, up 23.4p to 973p, Glencore, up 11.55p to 498.25p, and Fresnillo, up 16.4p to 729.8p.

The biggest fallers were Aviva, down 19.4p to 439.4p, Legal & General, down 11.7p to 270.6p, Hikma, down 50p to 1,441p, JD Sports, down 4p to 124.6p, and Abrdn, down 4p to 161.85p.