- Rentokil, Entain, Grafton rise after results
- Reckitt shares fall amid challenging market
- Money market pricing suggests only one BoE rate cut this year
- FTSE 100 up 0.1%, FTSE 250 up 04%
March 5 (Reuters) - UK shares edged higher on Thursday, supported by gains in energy stocks and positive corporate updates from firms, including Rentokil and Entain, while investors assessed the implications of the U.S.-Iran war entering its sixth day.
The blue-chip FTSE 100 index firmed 0.1% by 1201 GMT, while the FTSE 250 midcap index added 0.4%.
British equities continue to contend with the prospect of fewer interest rate cuts this year after the escalating conflict in the Middle East lifted oil prices and reinforced expectations of higher global inflation. Those concerns have pulled the FTSE 100 about 2.7% below the record high it reached on Friday.
Money market pricing now suggests only one quarter-point rate reduction by the Bank of England this year, compared with expectations for two cuts at the end of February. Traders assign a 75% probability that the central bank will leave interest rates unchanged at its meeting later this month.
Domestic economic data this week has been mixed. Activity in Britain's construction sector contracted for the 14th month in a row in February, a contrast with a more upbeat picture in the services PMI.
A separate BoE survey showed UK employers' expectations for wage growth held at their joint-lowest in nearly four years in February.
Rentokil jumped 13% to lead the FTSE 100 after the pest control firm reported a rise in annual adjusted pretax profit, while Entain gained 5.4% as the Ladbrokes-owner posted slightly better-than-expected annual profit.
Grafton gained 3.6% after the construction products distributor beat full-year adjusted operating profit and announced a new 25 million pound share buyback plan.
Energy giants Shell and gained about 1% each on the back of higher oil prices, boosting the UK benchmark index.
On the downside, Reckitt slipped about 6% after the maker of Durex condoms said it expected the challenging trading environment in Europe to continue.
Reporting by Medha Singh in Bengaluru; Editing by Vijay Kishore
Source: Reuters