Retail stocks surge on plan for energy bailout
StockS across the economy surged amid hopes a plan to cap energy bills will steer the country through the winter.
Prime Minister Liz truss, appointed yesterday by the Queen, is finalising a package of support for households and businesses that could cost some £140bn.
Shares across the retail sector rose amid hopes the cap will allow shoppers to spend more money on the High Street rather than having most of their cash sucked up by spiralling energy costs.
Fashion chain Next jumped 2.5pc, or 152p, to 6188p, supermarket group Ocado climbed 2.1pc, or 15.2p, to 734.8p, Sainsbury’s added 2.4pc, or 4.9p, to 209.9p and Tesco lifted 2.5pc, or 6.3p, to 255.9p.
online retailer Asos was on the rise, up 2.1pc, or 14p, to 681p. Rival Boohoo surged 3pc, or 1.28p, to 44.45p, B& Q- owner Kingfisher climbed 2.8pc, or 6.7p, to 246.3p and AB Foods, which owns Primark, bounced 2.2pc, or 32.5p, to 1509.5p. Food and drink sellers also received a boost with
Wetherspoons up 4.6pc, or 22.4p, to 511p, Mitchells & Butlers rising 7.4pc, or 11.3p, to 164.9p , Greggs adding 7.1pc, or 131p, to 1973p and Domino’s Pizza climbing 6.4pc, or 14.8p, to 245.6p.
Hargreaves Lansdown analyst Susannah Streeter said investors in the retail sector were ‘assessing’ whether the incoming government’s plans could help ‘ease the cost of living crisis’ and ‘put more money back into the pockets of their customers’.
there will also be hope among businesses that they could receive help to offset their own crippling energy bills, which are not currently covered by a price cap like households. the wave of optimism managed to lift the FTSE 100, which was up 0.2pc, or 13.01 points, at 7300.44.
the index was partially held back in early trading by the oil giants as a drop in crude prices sent shares in Shell down 1.7pc, or 39.5p, to 2308.5p and BP by 2.3pc, or 10.65p, to 452.7p.
the more domestic- focused FTSE 250 rose 1pc, or 191.16 points, to 18820.84.
Meanwhile, banking giant Lloyds was among the top blue-chip risers, gaining 4.1pc, or 1.78p, to 45.23p, after analysts at broker Jefferies hiked their target price on the stock to 83p from 78p and said the firm was likely to benefit from the ‘ pro-growth’ agenda of the truss government as well as ‘ lower taxes and supply side reforms’ proposed by kwasi kwarteng, who the new PM is expected to appoint chancellor.
Analysts also said the support package to offset higher energy bills was likely to lead to a ‘renewed interest in Uk assets’, while the economic support measures could strengthen the pound, helping to mitigate inflation.
North Sea- focused EnQuest became the latest oil and gas group to cash in on the energy price boom as its profits more than doubled. the group reported a pre-tax profit for the six months to the end of June of £158m, up from £42m in the same period last year, while revenues soared by 82pc to £816m. But shares fell 5.5pc, or 1.7p, to 29.45p after it confirmed it would pay taxes this year due to the Government’s windfall levy on oil and gas profits.
Equipment rental firm Ashtead posted a 26pc rise in profit to £514m in the three months to the end of July following strong demand in its core markets.
However, the company also flagged that ‘ increasing interest costs’ had prevented it from outperforming its previous profit forecasts. the shares were down 2.4pc, or 105p, at 4207p.
Packaging group DS Smith rose 3.4pc, or 9p, to 272p after highlighting ‘strong growth in profits’ over the last four months as its efficiency measures managed to offset a large rise in energy prices.