The FTSE 100 rebounded on Tuesday after sharp sell-offs on Monday sparked by recession fears as the prospect of additional interest rates hurt sentiment, along with lockdown hindering China’s economy and hampering the manufacturing sector.
Energy, banking, mining, and consumer staple stocks helped lift the FTSE 100 on Tuesday as retailers continued to suffer following dismal UK retail sales data.
On Tuesday, BRC announced a report in which it noted a 0.3% decline in retail sales during the month of April due to the rising cost of living and inflation hurting consumer spending.
The report said that consumer essentials are performing okay, however, big-ticket items such as electronics and furniture took the hit. However, according to data from Barclaycard, travel and holiday spending were on the rise.
Consumer Staple Stocks
Consumer staples stocks gained in a defensive trade on the FTSE 100 with the latest data from the BRC.
Unilever shares rose 2% to 3,711p, followed by grocers Tesco, Sainsbury, and Ocado’s shares trading up 0.6%, 2% and 0.4% to 277p, 237p and 786p respectively.
British American Tobacco and Imperial Brands also saw their shares rise 1.4% and 3.1% to 3,349p and 1,703p, respectively.
Coca-Cola and Diageo shares were trading up 1.5% to 1,590p and 0.6% to 3,748p, respectively.
Travel and Leisure Stocks
Travel and leisure stocks rose with Barclaycard reporting data which illustrated gains for travel and hotel companies on the FTSE 100 as UK consumers return to holidaying with the ease of Coronavirus restrictions.
Heathrow increased its passenger 2022 forecast by 16% to nearly 53m, driven by holidaymakers which also aided travel and leisure stocks.
Whitbread, InterContinental Hotels, and Flutter Entertainment shares rose 0.1% to 2,564p, 0.9% to 4,783p and 2.2% to 8,171p.
International Consolidated Airlines shares gained 0.02% to 127p despite JPMorgan cutting its price target to EUR1.95 from EUR2.20 and giving it a ‘neutral’ rating.
FTSE 100 Retail Stocks
Despite disappointing reports on retail spending during April, retail stocks seem to be performing well on the FTSE 100 in early morning trade on Tuesday.
JD Sports shares rose 0.7% to 118p, Next shares gained 2.2% to 6,035p, Kingfisher shares were trading up 1.6% to 245p and Howden Joinery shares were up 2% to 675p.
Energy Stocks
Brent Crude was up 0.5% to $106 a barrel continuing the momentum from when the EU planned to ban Russian oil. Due to the rise in the price of oil, Shell and BP benefitted.
Shell shares rose 0.4% to 2,234p and BP shares rose 0.88% to 408p, on the back of rising oil prices.
FTSE 100 Banking Stocks
Banking stocks rebounded after large Wall Street sell-offs on Monday, with HSBC shares up 1.7% to 501p and Natwest shares trading up 1.5% to 207p.
Barclays shares gained 1.3% to 147p despite Bank of America cutting its price target to 180p from 220p and giving it a ‘neutral’ rating.
Standard Chartered shares rose 2.5% to 560p as HSBC raised it to a ‘buy’ rating and increased its price target to 900p from 760p.
Lloyds Banking Group shares also increased 2.1% to 43.2p following the company’s announcement of the banking group issuing a notice of redemption for the entire outstanding amount of a notes issue.
The redemption notice concerns its $1bn 1.326% senior callable fixed-to-fixed rate notes, which are due in 2023 and they will be redeemed on June 15, 2022, at an amount equal to the principal amount, plus any unpaid interest.
Mining Stocks
Antofagasta shares rose 1% to 1,376p, Anglo American shares gained 0.2% to 3,305p and Glencore shares fell 0.4% to 456p as Goldman Sachs cut the price target of Antofagasta to 1,820p, Anglo American to 4,800p and Glencore to 710p on Tuesday.
Rio Tinto shares gained 0.2% to 5,191p.
Melrose Industries shares rose 4.7% to 112.7p after the company reported that trading is in line with expectations for the year. The group said that the Aerospace division is seeing continued growth and LFL sales were up 6%, however, Automotive and Powder Metallurgy were being hurt by constrained supply leading to LFL sales down 4%.
AJ Bell investment director Russ Mould said it appeared that fearful investors were increasingly seeking stocks with generous dividends, with mid-to-high yielding stocks such as Imperial Brands and Barratt Developments among those doing well today.