UK shares recover on Friday after three consecutive days of losses

UK shares recover on Friday after three consecutive days of losses
Written by:
Wajeeh Khan
10th July, 18:58
  • UK shares recover on Friday after three consecutive sessions of losses.
  • The FTSE 100 closes up 0.8% on Friday and the FTSE 250 posts a 1.2% of intraday gain.
  • Senior plc cuts its workforce by 12% and forecasts a 30% decline in H1 revenue.

London-listed shares remained hawkish on Friday but still closed lower on the weekly chart as the continuous rise in global COVID-19 cases weighed on risk appetite. Brexit concerns also contributed to limiting gains this week.

The UK blue-chip FTSE 100 index ended about 0.8% higher on Friday on the back of the heavyweight financial stocks that rebounded significantly. On the weekly chart, however, the commodity-heavy index closed nearly 1% down on Friday.

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FTSE 250 index ends 1.2% up on Friday

The domestically focused FTSE 250 index, on the other hand, ended 1.2% up on Friday. The index opened at 16,985.13 and closed at 17,188.39 after touching an intraday high of 17,248.43. On a year to date basis, FTSE 100 is roughly 20% down while the midcap index is more than 20% down at the time of writing. Learn more about the different stock exchanges and stock indices.

The British stock market gained last month on hopes of more stimulus to combat COVID-19. In July, however, the rising cases of the novel flu-like virus and only limited recovery in business activity as evident in the economic data, is threatening the gains once again.

British housebuilders like Barratt Developments (LON: BDEV) and Persimmon (LON: PSN) were among the top performers in the stock market this week as the government announced new stimulus measures that greatly benefit the UK’s housing market. According to UBS analysts:

“While we expect government policy to stay supportive to cushion the blow from the COVID-19 induced economic slowdown, this is not a game-changing fiscal package. The savings and pent-up demand of the past three months will likely provide a larger economic boost, supporting select pockets of value such as UK stocks.”

Senior plc forecasts a 30% decline in H1 revenue

On the downside, DS Smith underperformed this week after the international packaging business reported a 5% increase in annual profit last week but refrained from resuming dividend payments. International Consolidated Airlines Group also performed downbeat this week as rising COVID-19 cases kept travel stocks under pressure.

Other prominent price actions on Friday included Senior plc that announced to have slashed its workforce by another 12% to cushion the economic blow from COVID-19 that has so far infected a little under 300,000 people in the United Kingdom and caused over 44,500 deaths. The British engineering company also forecast a 30% decline in its H1 revenue on Friday.

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