Economic news

Financials Lift UK Stocks as Banking Fears Ebb

  • Next slumps on reiterating annual profit decline
  • Export-oriented companies rise as pound slides
  • UP Global records worst day in over a month on profit fall
  • FTSE 100 and FTSE 250 add 0.6%, each

March 29 (Reuters) - UK stocks edged higher on Wednesday, supported by gains in banks on easing fears of a financial sector meltdown, but Next hit a nearly three-month low after the retail bellwether maintained its cautious outlook for the year.

Next Plc slumped 6.2% after the fashion retailer said that higher costs for wages and energy were still expected to reduce its profit this year, even as it reported higher annual profit.

The exporters-heavy FTSE 100 rose 0.6%, while the domestically focussed FTSE 250 also added 0.6%.

"Overall sentiment has been boosted by the quelling of banking worries," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

"That's helping offset a big fall for Next, after it reiterated guidance that sales would fall this year. Hopes that a magic wand might materialise to dramatically improve the retailer's fortunes have ebbed away."

Late on Tuesday, John Glen, chief secretary to the UK Treasury, told Reuters that Britain's banks had not seen deposit outflows in reaction to the failures of U.S. regional lenders, aiding a 1.2% gain in UK lenders.

Both the FTSE indexes had ended the first two months of 2023 higher, buoyed by China's reopening and signs of stability in the domestic economy.

However, concerns about still high domestic inflation and the global financial system's stability have weighed down on the bourses in March, setting them up for losses.

Firms that earn through exports were also among gainers. Energy stocks and precious metals miners added 0.9% and 1.7%, respectively, as the pound slipped 0.3%.

Other export-focused companies including Diageo PLC, Reckitt Benckiser Group PLC and Tesco PLC were also up between 0.4% to 1.4%.

Among small-caps, UP Global Sourcing Holdings slid 2.9%, posting its biggest drop in over a month after the homeware brands distributor reported a 5% fall in adjusted pretax profit.

Reporting by Johann M Cherian in Bengaluru; Editing by Subhranshu Sahu and Rashmi Aich

Source: Reuters

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