On Wednesday, there was an increase in the resource-heavy FTSE 100 index in Britain, as concerns about soaring inflation and a slowing economy were overshadowed by a rise in oil stocks and strong forecasts from banking heavyweights Lloyds Banking Group and Reckitt Benckiser.
There was a 0.6% in the blue-chip FTSE 100 index and a 0.4% rise in the mid-cap FTSE 250 index. Both the months were on schedule for making strong gains by the end of the month.
There was a 2.8% gain in Reckitt Benckiser’s shares, as it reached highs of one year after raising its revenue forecast for the full year.
The Lysol and Dettol cleaning products maker hiked its prices steeply that allowing it to beat the sales expectations for the second quarter.
A 4.1% gain was recorded in the Llyods Banking Group after it raised its profitability forecast for the full year, along with its dividend.
This was primarily because the modest rise in provision for troubled loans was outpaced by the increase in interest rates.
Market analysts said that his expectations had not been high, and Llyod’s headline figures were able to meet expectations, as profit margins also got a boost due to the BoE’s interest rate hikes.
Oil majors BP and Shell also recorded gains of 1% each, which boosted the commodity-heavy FTSE 100 index, thanks to a rise in crude prices because of reduced inventories in the US and cuts in gas flows from Russia to Europe.
Meanwhile, Wall Street was enjoying a boost due to better-than-expected earnings reports from US tech giants like Alphabet and Microsoft.
Investors were gearing up for a rate hike from the US Federal Reserve later in the day. Market analysts said that there would be continued volatility after the end of the FOMC meeting.
There have been concerns about a potential recession in Europe because of the energy crisis and worries about an aggressive hike in the interest rates.
However, the FTSE 100 has received support from a weakening pound and resilient defensive sectors, such as consumer staples and healthcare.
Earlier in the day, data showed that there was a 4.4% rise in prices by supermarkets and shops in the 12 months leading to July.
It is the largest rise in prices seen since 2005 when the records first began. This reflects the rise in the cost of transport and food.
There was a 0.7% decline in the shares of Rio Tinto listed in the UK, after a 29% drop was reported by the global miner in its profits in the first half and it reduced its dividend by more than half.
A 10.4% gain was also seen in Wizz Air, which resulted in the domestically focused FTSE 250 recording gains. This was after the low-cost airline stated that improvement in pricing and revenue momentum would see a material operating profit.
The FTSE 100 index has performed quite well this year, much better than its peers, due to its commodity-heavy nature.