Shares across the economy rose amid hopes that a plan to limit energy bills will see the country through the winter.
Prime Minister Liz Truss, who was appointed by the Queen yesterday, completes a support package for households and businesses that could cost around £140bn.
Shares across the retail sector rose on hopes that the cap will allow shoppers to spend more on the high street rather than having to absorb most of their cash on rising energy costs.
Spending boost? Shares across the retail sector rose amid hopes that the energy price cap will allow shoppers to spend more on the high street
Fashion chain Next rose 2.5 percent or 152 pence to 6188 pence, supermarket group Ocado climbed 2.1 percent or 15.2 pence to 734.8 pence, Sainsbury’s was up 2.4 percent or 4.9 pence to 209 .9 pence and Tesco was up 2.5 percent. or 6.3p to 255.9p.
Online retailer Asos rose 2.1 per cent, or 14p, to 681p. Rival Boohoo rose 3 per cent, or 1.28 pence, to 44.45 pence, B&Q owner Kingfisher climbed 2.8 per cent, or 6.7 pence, to 246.3 pence and AB Foods, which owns Primark, rose 2.2 percent or 32.5 pence to 1509.5 pence p.
Food and drink sellers also received a boost, with Wetherspoons up 4.6 per cent or 22.4p to 511p, Mitchells & Butlers up 7.4 per cent or 11.3p to 164.9p, Greggs up 7, Up 1 per cent, or 131 pence, to 1973 pence and Domino’s Pizza was up 6.4 per cent, or 14.8 pence, to 245.6 pence.
Hargreaves Lansdown analyst Susannah Streeter said investors in the retail sector were “assessing” whether the new government’s plans could help “alleviate the cost of living crisis” and “put more money back into the pockets of their customers”.
There is also hope among businesses that they could get help to offset their own crippling energy bills, which aren’t currently covered by a price cap like households are.
The wave of optimism managed to lift the FTSE 100, which rose 0.2 percent or 13.01 points to 7300.44.
The index was partially held back by the oil giants in early trade as a drop in crude prices pushed shares of Shell down 1.7 percent or 39.5 pence to 2308.5 pence and BP down 2.3 percent or 10.65 pence to 452 .7p.
Inventory Monitoring – Wynnstay
Wynnstay shares rose yesterday after raising its full-year guidance.
The agricultural supply group said the 2022 harvest started earlier due to good weather, giving it “much greater visibility” of its fourth-quarter performance. The company was also boosted by the rising prices of the fertilizer it produced.
Results for the year to the end of October would be “well above” market expectations. Shares rose 4.7 percent, or 27 pence, to 604 pence.
The more domestically oriented FTSE 250 was up 1 percent or 191.16 points to 18820.84.
Meanwhile, banking giant Lloyds was among the top blue-chip climbers, gaining 4.1 percent, or 1.78p, to 45.23p after analysts at brokerage Jefferies lowered its price target on the stock to 83p from 78p and said the firm would likely benefit from the Truss government’s “pro-growth” agenda, as well as “lower taxes and supply-side reforms” proposed by Kwasi Kwarteng, whom the new prime minister is expected to appoint as chancellor.
Analysts also said the support package to offset higher energy bills would likely lead to “renewed interest in UK assets”, while the economic support measures could strengthen the pound and help curb inflation.
North Sea-focused EnQuest became the latest oil and gas company to benefit from the energy price boom as its profits more than doubled.
The group reported pre-tax profit of £158m for the six months to the end of June, up from £42m for the same period last year, while revenue rose 82 per cent to £816m.
But shares fell 5.5 percent, or 1.7 pence, to 29.45 pence after it was confirmed it would pay tax on oil and gas profits this year under the government’s windfall levy.
Equipment rental company Ashtead saw profit rise 26 per cent to £514m in the three months to the end of July on strong demand in its core markets.
However, the company also pointed out that “rising interest costs” prevented it from beating its earlier earnings forecasts. Shares fell 2.4 percent or 105 pence to 4207 pence.
Packaging giant DS Smith rose 3.4 percent, or 9 pence, to 272 pence after it highlighted “strong earnings growth” over the past four months as its efficiency measures managed to offset a sharp rise in energy prices.
Some links in this article may be affiliate links. If you click on this, we may earn a small commission. This helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow a business relationship to compromise our editorial independence.