Industrials, travel stocks lead UK shares higher; Ashtead Group jumps

File photo of a worker sheltering from the rain as he passes the London Stock Exchange in the City of London at lunchtime October 1, 2008. ― Reuters pic
File photo of a worker sheltering from the rain as he passes the London Stock Exchange in the City of London at lunchtime October 1, 2008. ― Reuters pic

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LONDON, Sept 16 — UK shares climbed today, lifted by industrials and travel stocks, while Ashtead Group gained after a strong earnings update.

The blue-chip index rose 0.5 per cent, while the domestically focused mid-cap FTSE 250 index advanced 0.6 per cent, after sliding 1.1 per cent in the previous session on concerns around spiking inflation.

Rolls Royce and British Airways owner IAG added 3.8 per cent and 3.6 per cent, respectively. They were among the biggest gainers in Aero and defence and travel and leisure indexes.

Drugmaker AstraZeneca’s 1.2 per cent jump provided the biggest boost to the FTSE 100 index.

Rental equipment provider Ashtead climbed 2.6 per cent after it reported a 68 per cent rise in first-quarter adjusted pretax profit and forecast annual results above its earlier expectations.

“Ashtead is a textbook cyclical company ... means when the economy grinds to halt, so does Ashtead’s business,” said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.

“That’s partly why the numbers look so flattering this quarter against the very tough conditions of last year.”

The FTSE 100 and the FTSE 250 indexes have declined about 1 per cent and 2.3 per cent, respectively, so far this month as a better-than-expected labour market recovery and rising price pressures have stoked concerns of a sooner-than-expected policy tapering by the Bank of England.

“The FTSE will likely continue feeling the pinch of a stronger pound and break the 7000p support despite firming oil and energy prices, because the reflation trade isn’t strong enough,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

The banks, miners, homebuilders, and even travel and leisure stocks have fallen between 1.5 per cent and 5.9 per cent so far in September.

Investors will now closely watch August retail sales data on Friday and the outcome from the BoE’s policy meeting next week.

Drax rose 7 per cent to the top of FTSE 150 index after Barclays raised its price target on the British power generator’s stock.

IG Group Holdings Plc jumped 4.3 per cent as the online trading platform maintained its medium-term targets after reporting a drop in adjusted first-quarter revenue. — Reuters

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