United Kingdom’s FTSE 100 Hits More than 1-Week High on Energy Boost; ASOS Jumps
On June 5, 2023, the UK’s FTSE indexes surged to more than one-week highs, boosted by energy stocks after top oil exporter Saudi Arabia made a promise to cut supplies. The resources-heavy FTSE 100 climbed 0.6%, reaching its highest since May 24. Energy stocks jumped 1.2%, while the mid-cap FTSE 250 rose 0.7% to hit its highest since May 23.
ASOS Takeover Deal
ASOS PLC (ASOS.L), an online fashion and beauty retailer, also played a significant role in the surge of FTSE stock prices. The company’s shares rose by 13.2% after the report came out that Trendyol, a Turkish retailer backed by Alibaba, had made a 1 billion pound ($1.24 billion) takeover bid for the company. “If the bid is as big as it seems, it is exciting,” said Christopher Peters, trading floor manager at Accendo Markets, adding that the deal was still speculation at that point.
Other Prominent Companies
Furthermore, UK-listed shares of Indivior Plc (INDV.L) increased by 9.8%, following an announcement by the US drugmaker stating that it had resolved a lawsuit accusing it of illegally suppressing generic competition for its opioid addiction treatment Suboxone. AstraZeneca Plc (AZN.L) added 0.4% after trial data showed its therapy Tagrisso cut the risk of death by more than half in patients with a type of lung cancer.
Central Banks and Monetary Tightening
Following a disappointing end to May, UK equities slowly began to recover as investors started to look past uncertainties surrounding the US debt deal. Moreover, they remained hopeful that central banks worldwide could hit pause on monetary tightening, starting with the Federal Reserve. The broader telecommunications sector rose 2.5%, rebounding from its May low after a report indicated that Amazon.com Inc (AMZN.O) was negotiating to get the low-cost wireless services for its Prime members.
Conclusion
The rise of UK’s FTSE indexes, particularly that of the FTSE 100 and the FTSE 250, was a promising development for investors. The energy sector’s strength and ASOS‘ potential takeover deal were the primary contributors to this surge. Still, other companies, including AstraZeneca and Indivior, also played a significant role in this development. Investors’ positive attitude towards central banks’ actions provides a glimmer of hope that monetary tightening might subside, providing even more opportunities for growth. Overall, these factors make UK’s FTSE a promising venture for investors looking for good returns.
<< photo by Matthew Henry >>
