FTSE 100 recovers after three-day decline

London markets have recovered some ground after a three-day decline in the FTSE 100 following a swathe of downbeat economic forecasts and exacerbated recession fears.

Stocks lifted amid some positive reaction to China unveiling a 146-billion-dollar (£123 billion) stimulus package for its struggling economy.

But another day of gas price rises and apprehension ahead of Friday’s energy price cap announcement meant London’s top index was just about treading water.

The FTSE 100 closed the day 8.23 points higher, or 0.11%, at 7479.74.

Michael Hewson, chief market analyst at CMC Markets UK said: “After an initially strong start, markets in Europe have retreated from their highs, as an initial boost from Asia markets and the announcement of a new China stimulus program gave way to some weakness, as European gas prices continued to make new record highs.

“While, on the face of it, the sum of 146 billion dollars (£123 billion) in the new China stimulus package look impressive, it is hard to see how it can work if authorities continue to impose stop, start lockdowns in response to Covid outbreaks.

“It is akin to constantly starting, stopping, and restarting a car, without doing any trips in between.

“Eventually you will get a flat battery.”

Elsewhere in Europe, Germany’s top index managed to make gains after hitting its lowest levels of the month earlier this week.

The Dax was up 0.34% at the end of the day, while the French Cac had dipped just 0.06%.

In the US, top indices were in the green amid better-than-expected unemployment claims data from last week.

However, traders will be apprehensive ahead of central bank chief Jerome Powell’s Jackson Hole speech on Friday where he is expected to confirm further interest rate rises to counter surging inflation.

The S&P 500 was up 0.57% and Dow Jones was 0.11% higher when European markets closed.

The pound made almost no movement against the euro, up by 0.01% at 1.185, and was down 0.16% against the dollar at 1.1807.

The price of Brent crude oil was down 0.14% at 101.18 dollars per barrel.

In company news, Amigo Loans saw its shares slip after announcing its customer base had halved and its revenue was down by two thirds in the first half of the year.

The struggling lender said the decline has been driven by a reduction in its loan book, as it prepares to restart lending by late February.

Shares in the company have plunged by more than 98% in the past five years.

Its share price was down 0.5p at 5p at the end of the day.

Meanwhile, Harbour Energy reported a massive jump in its profits which increased more than twelvefold in the first six months of the year, it said on Thursday.

The company, which is the largest producer of oil and gas in the UK’s North Sea, said its pre-tax profits hit 1.5 billion dollars (£1.3 billion), up from 120 million dollars (£102 million) in the same period a year earlier.

It also said it would be returning an extra 100 million dollars (£85 million) in share buybacks.

Shares in Harbour Energy leapt up by more than 10% during the day, closing 43.1p higher at 473.6p.

Royal Mail was back in the public eye after a warning from the Business Secretary over potential plans for Vesa Equity Investment to increase its stake in the delivery giant to more than 25%.

The investment company, which is controlled by Czech billionaire Daniel Kretinsky, could face a national security probe if it acquires more than its current 22% of shares.

Shares in Royal Mail were up 4.8p to 266.1p when markets closed.

The biggest risers on the FTSE 100 were CRH, up 105.5p at 3,236.5p, Pershing Square, up 60p at 2,810p, Rentokil, up 11.6p at 546.2p, Antofagasta, up 20p at 1,167p, and Informa, up 9.4p at 560p.

The biggest fallers of the day were Phoenix, down 25.8p at 602.6p, Coca-Cola HBC, down 80.5p at 1,975.5p, Persimmon, down 59p at 1,485p, Mondi, down 57p at 1,454.5p, and B&M, down 14p at 375.3p.