Economic news

Energy Stocks Lift UK's FTSE 100, WPP Caps Gains

  • WPP slides after FY guidance cut
  • U.S. jobs data eyed
  • Both FTSE 100, FTSE 250 headed for weekly losses
  • FTSE 100 up 0.1%, FTSE 250 adds 0.2%

Aug 4 (Reuters) - UK's FTSE 100 rose on Friday after three sessions of losses, buoyed by rising energy stocks, while WPP shares slumped after the world's biggest advertising group reduced its full-year outlook, keeping gains in check.

The FTSE 100 added 0.1%. The more domestically-focussed FTSE 250 midcap index rose 0.2%.

The internationally-focussed FTSE 100 was headed for a weekly loss after rising for three, as stocks were rattled from downbeat earnings and a surprise U.S. credit rating cut by ratings agency Fitch on Tuesday. The midcap index was on track for a weekly fall of over 1%.

Heavyweight energy stocks added 0.8% as oil prices ticked higher.

The FTSE 350 media index fell 0.9% as WPP slipped 7.0% to touch an over seven-month low after cutting its full-year like-for-like growth forecast to 1.5%-3.0% from 3%-5%.

"WPP is struggling with lower revenues from North America because of weaker spending from technology clients," said Victoria Scholar, head of investment at interactive investor.

"After the slump in technology stocks last year, the sector has been carrying out major cost cuts this year such as cutting staff and reducing ad spending, with the latter hurting WPP."

UK's travel and leisure sector jumped 1.3% after falling for three straight sessions.

Looking ahead, eyes would be on U.S. jobs data due later in the day to assess the state of the labour market in the world's largest economy and the subsequent outlook on interest rates.

Meanwhile, three European banks lowered their Bank of England (BoE) terminal rate forecast to 5.50% from a prior estimate of 5.75% a day after the central bank raised borrowing costs by a modest 25 basis points.

A survey showed Britain's construction sector returned to growth in July but house-builders suffered another sharp contraction.

Capita slumped 15.6% after the outsourcing firm said it expected net exceptional costs of up to 20-25 million pounds ($31.8 million) related to a cyber incident in March.

Reporting by Shashwat Chauhan in Bengaluru; Editing by Varun H K and Eileen Soreng

Source: Reuters


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