London stocks gain on upbeat corporate earnings

By Pranav Kashyap, Khushi Singh and Shubham Batra

(Reuters) – British equities recovered for a second straight session on Thursday supported by positive corporate updates, while the pound firmed against the dollar as traders lowered their expectations of any early rate cut by the Bank of England.

The benchmark FTSE 100 rose 0.4% for the day but underperformed its European peers.

The FTSE 250 midcap index snapped its five-day losing streak to gain 0.6%, driven by a 30.5% surge in Hipgnosis Songs Fund after Concord Chorus said it would acquire the music investor for $1.4 billion.

The pound appreciated by 0.2% against the dollar and was last trading at 1.246, while the 10-year UK bond yield ticked slightly higher to 4.273.

BoE policymaker Megan Greene said Britain’s latest wage growth and services price inflation data is too high for the UK central bank to consider cutting interest rates.

Traders expect the BoE to cut interest rates by 44 basis points this year, with the first cut expected only in September.

Among the biggest movers on the FTSE 100, easyJet rose 2.3% after the airline’s winter performance improved on growing demand and it said summer bookings were building well.

“What could have been an even weaker-than-usual winter update affected by disruption to flights in the Middle East ended up being saved by Easter, encouraging holidaymakers to jet off to catch some spring sunshine even if temperatures weren’t quite what they would usually be,” said Adam Vettese, analyst at investment platform eToro.

National Grid climbed 1.7%, leading gains in the utilities sector, after the energy utility upgraded its 2023/24 profit guidance.

Deliveroo advanced 4.5% after the meal deliverer returned to order growth in the first quarter.

Rentokil fell 7.6%, the bottom performer on FTSE 100, after the pest control company announced its first-quarter trading updates.

The broader industrial support services index led sectoral declines, dipping 1.8%.