UK stocks rise on media stocks boost, global rate pause hopes

By Shubham Batra, Sruthi Shankar and Khushi Singh

(Reuters) -British stock indexes closed higher on Thursday, with Informa leading gains in media stocks, while hopes of a pause in interest rate hikes by major central banks also helped outweigh declines in energy shares.

The FTSE 100 rose 0.2%, but gains in the blue-chip index lagged those in the domestically focused FTSE 250, which rose 0.5%.

Media shares added 3.9%, hitting a three-month high, driven by a 4.1% rise in Informa after it said it was on track to meet the top end of its full-year forecasts.

Investor optimism grew on an anticipated pause in interest rate hikes after the Fed raised rates by 25 basis point on Thursday. Earlier on Thursday, the European Central Bank also hiked rates by the same margin.

The Bank of England will announce its rate decision next week.

“BoE seems set to follow the Fed and ECB’s lead on rates, and a dovish tone next week should help UK stocks to make up some lost ground,” said Chris Beauchamp, chief market analyst at IG Group in a note.

British stocks lagged a much larger rally among European peers as euro zone blue-chips closed at their highest level since December 2007.

Energy shares slipped 0.8% as Shell slid 1.4% following a 56% drop in its second-quarter profit. [O/R]

Centrica was the biggest gainer on the FTSE 100, up 7.5%, as it proposed a 33% increase in its interim dividend after posting a jump in first-half profit.

Barclays was among the biggest losers, down 5.3% after the bank warned of growing pressure on its UK business and missed forecasts for its investment banking unit.

The banking sector was down 0.9%.

Relx added 4.7% after the European information provider raised its interim dividend by 8% and kept its full-year forecast unchanged on Thursday.

(Reporting by Sruthi Shankar, Shubham Batra and Khushi Singh in Bengaluru; Editing by Savio D’Souza, Sonia Cheema and Richard Chang)