London stocks end higher led by gains in energy, travel stocks; Tesco weighs

Devik Jain and Shashank Nayar
·2-min read
A trading screen is seen following the opening of the markets by British Chancellor of the Exchequer Philip Hammond and Chinese Vice-Premier Hu Chunhua at the London Stock Exchange in London

By Devik Jain and Shashank Nayar

(Reuters) -British shares ended higher on Wednesday, helped by gains in heavyweight energy and travel stocks, while Tesco slipped to the bottom of the index after reporting a 20% drop in full-year pretax profit.

The blue-chip index rose 0.7%, with BP and Royal Dutch Shell providing upward momentum, while commodity trader Glencore Plc was the top gainer, up 5.4% after Goldman Sachs upgraded the stock to "buy" from "neutral".

“The FTSE 100 is still far away from its March 2020 highs, so there is good potential upside left and investors seem to be quite optimistic on UK equities as we enter the earnings season,” said Michael Baker, an analyst at ETX Capital.

However, gains were capped by Britain's biggest retailer Tesco, which tumbled 2% to the bottom of the FTSE 100, as the cost of adapting the business for the pandemic wiped out its "exceptionally strong" sales.

The blue-chip FTSE 100 has risen 7.4% this year as investors bet on a faster pace of economic recovery as businesses reopen, further aided by vaccine rollouts and government stimulus. However, a recent surge in global COVID-19 cases and concerns of higher inflation have limited gains.

The mid-cap index gained 0.4% with low-cost air carrier Easyjet giving the biggest boost, up 5.8%.

The wider travel sector gained 1.5% on hopes that the great British getaway would be possible this summer, with easyJet predicting that most of Europe would be open for travel and British Airways confident on routes to the United States, despite ongoing uncertainty.

Drugmaker AstraZeneca Plc rose 1.5% after China's health regulator approved Tagrisso, its lung cancer treatment, as an adjuvant treatment for patients with early-stage lung cancer.

Among other stocks, Robert Walters shares jumped 6.3% after the recruiting company forecast upbeat annual profit.

Burberry Group added 1.2% as its French rival LVMH's first-quarter sales bounced back far more quickly than expected.

(Reporting by Devik Jain in Bengaluru; Editing by Shailesh Kuber and Uttaresh.V and Barbara Lewis)