FTSE outperforms peers on back of utilities gains

LONDON’S top index outperformed its international peers yesterday as it was helped by some of its utility companies. Looking ahead to the Government’s energy strategy, which is, finally, probably going to be published this week, some of the UK’s biggest energy companies gained over the trading. National Grid and SSE were both up around 3%, while water companies also came along for the ride, with Severn Trent and United Utilities.

CMC Markets analyst Michael Hewson said that concerns over the killings of civilians in Bucha in Ukraine, and the potential EU ban on Russian coal that could come in response, has hit European markets.

“It is becoming ever clearer that Russia is likely to become increasingly more isolated as sanctions get tightened and widened further, with the prospect that inflationary pressure in the global economy will remain more persistent in the coming months,” he said.

The FTSE outperformed with a 0.7% or 54.8 point rise, hitting 7,613.72, due to the “more defensive energy sector holding up well, ahead of the publication of the UK Government’s new energy security strategy later this week, with SSE shares hitting a new record high, while National Grid and United Utilities shares have also moved higher,” Mr Hewson said.

The index likely also won out because of a weak pound. The price of sterling dropped 0.22% to 1.3102 against the dollar. It dropped just 0.06% to 1.1996 euros.

The Dax in Germany dropped 0.7%, while France’s Cac 40 fell by 1.3%.

Shortly after markets closed in Europe, the S&P 500 was trading down 0.6% on Wall Street and the Dow Jones was down 0.1%.

Oil prices were stable, with Brent crude trading down just 0.2% to 107.36 dollars per barrel.

In company news, both Crest Nicholson and Taylor Wimpey saw their shares drop when they revealed new bills to ensure tall buildings are fire safe. The companies, and Persimmon, signed up to a new Government safety pledge for medium-height buildings.

Crest said this would cost it between £80 million and £120 million, its shares dropped 2.8%. Taylor Wimpey will put aside another £80 million - its shares closed down 0.7%.

Shareholders in Go-Ahead were cautiously optimistic about a promise of new payouts and increased earnings. The transport group said that, as it recovers from the pandemic, it hopes to return to its old dividend policy and is looking to buy bus companies abroad. Shares rose 2.3%.

The biggest risers on the FTSE 100 were: National Grid, up 42p to 1,211p; SSE, up 61p to 1,797p; United Utilities, up 39p to 1,166p; Croda, up 262p to 8,028p; and GlaxoSmithKline, up 51p to 336.6p.

The biggest fallers on the FTSE 100 were: Airtel Africa, down 6p to 138.3p; Melrose Industries, down 4p to 122.95p; Endeavour Mining, down 61p to 1,900p; Smiths Group, down 43p to 1,389p; and CRH, down 90p to 2,980p.