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UPDATE 2-UK's FTSE 100 bounces back supported by oil price rise

Published 22-04-2020, 03:29 pm
© Reuters.
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(For a live blog on European stocks, type LIVE/ in an Eikon news window)

* FTSE 100 up 2.3%, FTSE 250 adds 1.2%

* UK inflation drops as shoppers turn cautious

* Drax jumps after reaffirming 2020 core profit outlook

* Boohoo climbs as sales recover after downtrend (Updates to close)

By Devik Jain and Sruthi Shankar

April 22 (Reuters) - Britain's FTSE 100 gained on Wednesday as a 6% rally in energy majors BP (LON:BP) and Royal Dutch Shell (LON:RDSa) and positive corporate updates injected calm into equity markets after an oil-driven rout.

The commodity-heavy FTSE 100 .FTSE outperformed its European peers, closing 2.3% higher after cratering oil prices knocked 3% off the index on Tuesday.

After falling to its lowest since 1999 earlier in the session, Brent crude prices LCOc1 made up some ground on the prospect of extra pledges from major producers to cut output amid plunging oil demand due to the coronavirus crisis. O/R

The FTSE oil & gas index .FTNMX0530 rose 5.5%, while other cyclical sectors such miners, banks and insurers were all higher.

"A much-needed rebound from Brent Crude allowed the Western indices to hold onto their growth," said Connor Campbell, financial analyst at SpreadEx.

UK-listed shares of Irish building group CRH CRH.L CRH.I jumped 6.7% as it said it hoped to benefit from post-coronavirus economic stimulus, and that it would press ahead with a 15% rise in its 2019 dividend. fashion retailer BooHoo BOOH.L surged 12.3% after it said sales had recovered in recent weeks after taking a hit in March due to the coronavirus crisis. shares have surged by about 130% since mid-March lows, taking its market value to almost double that of Marks and Spencer MKS.L .

Domestically oriented midcap shares .FTMC rose 1.2%, with power producer Drax Group DRX.L soaring 16% after reaffirming its 2020 core profit outlook and saying it expects to pay its 2019 dividend despite the hit from the pandemic. miner Antofagasta ANTO.L rose 6.3% after it posted 4.6% rise in March-quarter production. housing specialist Unite Group UTG.L rose 4.2% on expectations of a smaller-than-expected drop in income. FTSE 100 has recovered about 17% from March lows as central banks and governments took unprecedented steps to shield the global economy.

However, analysts are sceptical of further gains, with latest Refinitiv forecasts showing companies listed on the pan-European STOXX 600 index .STOXX set to record a 37% decline in earnings in the second quarter. First-quarter profits are expected to decline about 25%. showed Britain's inflation rate dropped in March when oil prices tumbled and the health crisis escalated, with a fall in clothing and footwear prices indicating how cautious shoppers were turning. are waiting for business activity readings from across the world on Thursday, which are likely to show economic activity slumped sharply in April.

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