London stocks climb on the last day of tumultuous quarter

A worker shelters from the rain under a Union Flag umbrella as he passes the London Stock Exchange in London, Britain, October 1, 2008. REUTERS/Toby Melville/File Photo
  • FTSE 100 up 0.2%, FTSE 250 adds 2.3%
  • FTSE 100 marks 2nd straight quarterly decline
  • Joules focus on profitability makes progress
  • UK Q2 GDP better than expected

Sept 30 (Reuters) - UK's mid-cap stocks jumped on Friday, with beaten-down sentiment getting a small lift from data that showed the British economy performed better than expected in the second quarter, though traders remained cautious.

London's blue-chips FTSE 100 index (.FTSE) edged 0.2% higher thanks to a comeback in hammered bank stocks (.FTNMX301010), which rose 0.6%.

After losing more than 10% over the last six sessions, the domestically focussed FTSE 250 index (.FTMC) surged 2.3% despite a 21.3% plunge in cruise operator Carnival PLC (CCL.L) after it forecast a loss for the fourth quarter amid rising costs. read more

Holiday group TUI dropped 10.1%.

The Office for National Statistics said economic output in Britain unexpectedly rose by 0.2% in April through June, revised upward from a previous reading of a 0.1% contraction, but remained below its pre-pandemic peak. read more

"The real test is yet to come. The full extent of sky-high inflation and now increased borrowing costs will only begin to be truly felt in the second half of the year," Danni Hewson, financial analyst at AJ Bell, said.

"Even with the government's energy support package, many households will see their bills shoot up, leaving them less cash to pay for any of those discretionary goods and services that help UK PLC soar."

On the quarter, the FTSE 100 fell 3.8%, extending declines to a second straight quarter amid fears of a hit to economic growth from tighter monetary policy to curb surging inflation.

Some hefty declines came in the last week after the government unveiled a 'mini-budget' which proposed unfunded tax cuts. The subsequent sell-off in gilts forced the Bank of England to step in with emergency bond buying measures to calm the markets, helping the pound off record lows.

Joules Group (JOUL.L) surged 26.0% on Friday as the struggling British fashion retailer said that its turnaround plan was making good progress. read more

Reporting by Johann M Cherian in Bengaluru; Editing by Anil D'Silva, Neha Arora and Andrew Heavens

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