Banks, energy shares lift FTSE 100; IAG jumps on recovery hopes

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IAG gains on optimism around reopening of transatlantic travel
Pound extends losses after BoE leaves rates unchanged
FTSE 100 up 0.3%, FTSE 250 adds 0.4%
Nov 5 (Reuters) – London’s FTSE 100 ended higher on Friday, led by banks and energy stocks, while British Airways parent IAG jumped on recovery hopes despite warning of a big loss in 2021.

The blue-chip FTSE 100 (.FTSE) gained 0.3% to record its highest close since February 2020, with oil majors BP (BP.L) and Royal Dutch Shell (RDSa.L) up 1.7% and 1.5%, as crude prices extended gains for the second session.

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The pound extended its decline, down 0.1%, having recorded its worst day in over a year on Thursday, further boosting the export-heavy FTSE 100 index and dollar earner companies like British American Tobacco (BATS.L), Unilever (ULVR.L) and Diageo (DGE.L).

“Consumer stocks have taken the cue from the MPC’s assessment the economy is on a positive trajectory,” said Kunal Sawhney, CEO of Kalkine Media.

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“Despite the GDP forecast being revised downward by a percentage point, the demand is likely to sustain, which will help the consumer stocks to continue the momentum gained recently,” he added.

The banking sector (.FTNMX301010) rose 1.1%, rebounding from its worst session in over a month in the prior session, despite the UK’s 10-year government bond yields recording a one-month low after a surprise decision by the Bank of England on Thursday to hold off on raising interest rates.

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The FTSE 100 rose 1% this week, underperforming the 2% increase in the UK’s mid-cap index (.FTMC) and a 1.8% weekly gain in the wider European stock aggregate (.STOXX), bogged down by volatile commodity prices and heavy losses in the banking sector on Thursday following the BoE’s rate decision.

The domestically focussed FTSE 250 index (.FTMC)was up 0.4%, closing at a month high aided by consumer discretionary stocks.

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IAG (ICAG.L) gained 6.1% after the British Airways owner said its is “very optimistic” about the reopening of transatlantic travel and planning to ramp up capacity on those routes next year, after reporting big loss in 2021. read more

Other British travel stocks like Wizz Air (WIZZ.L) and Easyjet (EZJ.L), gained 2.8% and 6% respectively.

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Britain’s THG (THG.L) gained 3.9% after investment management company Blackrock disclosed its 5.37% stake in the online consumer brands company on Thursday.

FTSE 250 mid-cap index outperforms FTSE 100 for 4 weeks
FTSE 250 mid-cap index outperforms FTSE 100 for 4 weeks
Reporting by Bansari Mayur Kamdar and Amal S in Bengaluru; Editing by Subhranshu Sahu, Krishna Chandra Eluri and Giles Elgood