UK main index bounces back on WPP strength; Relx tumbles

(Reuters) - A surge in WPP shares after it reported underlying sales that were better than feared helped the British blue-chip bourse snap a three-day losing streak on Friday, while the midcaps surged to a four-month high.

FILE PHOTO: Traders looks at financial information on computer screens on the IG Index trading floor in London, Britain February 6, 2018. REUTERS/Simon Dawson/File Photo

The FTSE 100 added 0.5 percent, as a steep fall in information and analytics provider Relx curbed gains in the index, while the FTSE 250 bounced 1.1 percent to levels not seen since early November.

Ireland’s main share index, seen as a barometer for Brexit sentiment, meanwhile rose 1.3 percent to its highest since November.

“I think the market is progressively anticipating a compromise (on Brexit) ... I remain optimistic regarding the pound and more domestic UK shares,” Raymond James analyst Chris Bailey said.

WPP, the world’s biggest advertising company, jumped 5 percent on its best day in nearly a year after results showed that although underlying net sales fell 0.4 percent in 2018, it was better than a forecast of a 0.5 percent dip.

London Stock Exchange Group added 4.2 percent after a rise in 2018 adjusted operating profit and a round of job cuts.

A positive read-across from Italian luxury group Moncler’s results sent Burberry 3.1 percent higher.

“I think the people who wished they’d bought into the market two weeks ago are buying in now,” CMC Markets analyst David Madden said.

“A lot of the negative news has been overlooked in recent weeks and traders are viewing that as a sign that negative news hasn’t held sentiment back so far and is probably not going to hold it back in the near term.”

A dip in the pound helped lift shares in dollar earners, with British American Tobacco rising 4 percent.

Relx was a sour spot on the FTSE 100, slumping 7 percent for its worst day in nearly a decade as the University of California announced its intention not to renew its subscription with the company’s Elsevier unit.

The news also dragged the stock into the red for the year.

Among midcaps, asset manager Jupiter Fund Management jumped 7.6 percent after it said its capital surplus had increased, margins were steady and costs were set to be lower in the year ahead.

Industrial firm Coats Group underperformed with an 8 percent drop as its full-year operating profit was hit by a rise in costs.

Small-cap recruiter Robert Walters surged 12 percent as investors focussed on the positive 2018 results rather than a cautious tone set by the company on Brexit and its impact on confidence.

GRAPHIC: WPP slow to catch up with changing landscape in advertising industry, click

Reporting by Muvija M in Bengaluru; Editing by Keith Weir