By Barbara Kollmeyer
London stocks climbed on Wednesday, outperforming weaker European indexes as shares of GlaxoSmithKline surged after an investor meeting, while stock in major oil companies also rose in step with crude prices.
That’s a day ahead of the Bank of England’s policy meeting, when markets are expecting no change on the bank’s interest rate or asset-buying policies. However, concerns about the pickup of inflation will be at the core of that meeting and investors will be scrutinizing what the bank has to say.
Fresh data from IHS Markit showed the flash U.K. composite output index dipping in June to a two-month low of 61.7, from 62.9 in May, though markets brushed aside the data. The survey indicated signs that the U.K.’s rate of expansion appears to have peaked with both output and new order growth cooling slightly from May’s record gains, noted IHS Markit’s chief business economist, Chris Williamson.
“From a U.K. perspective, the decline in services growth is worrying, with exports falling for the second consecutive month. One common theme appears to be the impact of rising prices, with input costs rising at the fastest pace in 13 years,” said Joshua Mahony, senior market analyst at IG, in a note to clients.
Among companies in focus, shares of GlaxoSmithKline /zigman2/quotes/209463850/composite GSK +0.71% /zigman2/quotes/200381158/delayed UK:GSK +0.45% rose 1.7%, paring a stronger earlier advance after the U.K. pharmaceutical major updated investors. Glaxo said it expects to deliver sales growth of more than 5% and adjusted operating profit of more than 10% over the next five years, noting that the targets exclude COVID-19-related revenue.
Vodafone /zigman2/quotes/202862751/composite VOD +1.79% /zigman2/quotes/202484985/delayed UK:VOD +2.41% shares rose 1.5%, after the telecoms giant said its entire European operations will be fully powered by electricity from renewable sources starting on July 1, as it aims to reach net zero carbon emissions by 2030.
Shares of energy companies were underpinning the FTSE 100 and rising alongside climbing oil prices /zigman2/quotes/209723049/delayed CL00 +0.14% , with Royal Dutch Shell /zigman2/quotes/206428183/delayed UK:RDSA +0.04% /zigman2/quotes/205095589/composite RDS.A -0.58% up 2.4% and BP /zigman2/quotes/207305210/composite BP -0.38% /zigman2/quotes/202286639/delayed UK:BP +0.04% rising 1%.