LONDON: UK’s top share index edged up on Tuesday, as gains in defensive sectors outweighed mining and energy stocks pulled down by strict COVID-19 lockdowns in China and prospects of further central bank tightening.
The blue-chip FTSE 100 ended up 0.2% and the domestically oriented FTSE 250 index rose 0.1%.
Defensive sectors such as consumer staples that tend to be less sensitive to the economic climate boosted the FTSE 100 index. Unilever, Reckitt Benckiser and British American Tobacco rose near 1% each.
Capping gains on the resource-heavy FTSE 100, the industrial metals and mining index and energy index dropped 0.6% and 1.7%, respectively, as commodity prices slid on the back of a strong US dollar, China’s lockdowns and higher benchmark interest rates globally.
Travel and leisure stocks gained 1.1%, with British Airways owner IAG and Wizz Air rising 6.5%, and 4.6%, respectively.
“We have seen oil fall bit below $100 a barrel and that obviously is good news for airlines because a lot of their costs are taken up by fuel. That is partly what you’re seeing with IAG,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said.
“Nervousness that was taking hold on financial markets this morning in terms of concerns about fresh COVID outbreaks in China and falling global growth has eased off a little but investors are still pretty sensitive.” Meanwhile, Britain’s new prime minister will be announced on Sept. 5, with the first votes to begin eliminating candidates in a crowded and increasingly unpredictable and divisive contest to replace Boris Johnson this week.
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