UK stocks inch up on energy boost; real estate shares fall after Jefferies downgrade

By Siddarth S

(Reuters) -London stocks reversed course on Wednesday in choppy trading helped by gains in energy and healthcare shares, while real estate stocks fell after Jefferies analysts said London’s embattled office market is in ‘rental recession’.

Both the FTSE 100 and FTSE 250 indexes inched up 0.1% by 0836 GMT.

Energy stocks gained 0.5%, boosted by a 7% jump in Ithaca Energy after Britain gave the greenlight for developing the Rosebank oil and gas field in UK North Sea.

“Ithaca Energy has been on a roller coaster ride since its launch onto the London market, weighed down partly by the windfall tax. So, the approval marks a ray of light for the company,” Susannah Streeter, head of money and markets, Hargreaves Lansdown said in a note.

Oil prices rose by more than $1 a barrel, further aiding energy stocks, as markets focused on supply tightness heading into winter. [O/R]

London’s embattled office market is in ‘rental recession’ as volumes of empty space across the capital’s West End, City and Canary Wharf business districts hit a 30-year high, analysts at Jefferies said.

Land Securities, British Land, Derwent London and Great Portland Estates fell between 1% and 3% after Jefferies downgraded all the stocks.

The broader real estate index fell 0.9%.

After the pandemic, the roll-out of flexible working policies for employees – work-from-home and hybrid working setups – from businesses and corporate companies has partly dampened demand for huge office rental spaces.

Healthcare stocks were up 0.6%.

The European Medicines Agency (EMA) will discuss the risk that patients on Wegovy, Ozempic or similar drugs may suffer certain complications under anaesthesia that can lead to pneumonia, according to an agenda posted on the regulator’s website.

Flutter shares rose 1.1% after the Fanduel and Paddy Power owner said it had bought an initial 51% stake in Serbia’s number two sports betting and gaming operator MaxBet for 141 million euros ($148.95 million).

(Reporting by Siddarth S in Bengaluru; editing by Eileen Soreng)