UK midcaps hit 11-week high on hopes of post-lockdown recovery

FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville/File Photo

(Reuters) – British midcaps hit an 11-week high on Wednesday as hopes of an economic recovery with the easing of coronavirus lockdowns offset concerns about growing political unrest in Hong Kong over Beijing’s proposed national security laws.

The domestically focussed FTSE 250 .FTMC gained 1.3%, rising for an eighth straight session as thousands of retailers prepared to reopen from June 1 from a months-long shutdown that has crushed the UK economy.

The blue-chip FTSE 100 .FTSE added 1.1%, but investors remained cautious about simmering Sino-U.S. tensions as U.S. President Donald Trump said he was preparing to take action against China over its move to impose the security bill in Hong Kong.

“Tensions between the world’s two largest economies could jeopardize any potential trade accord, but at the moment, investors appear to be placing more bets on a global economic recovery,” said Charalambos Pissouros, market analyst at JFD Group.

The midcap FTSE 250 has rallied about 38% since crashing to a seven-year low in March, and although it remains about 21% down on the year, traders are counting on a faster revival in supply chains and consumer demand to pull out of what is expected to be the worst UK recession in 300 years.

Data on Wednesday showed UK grocery sales rose 14.3% during the 12 weeks through May 17, the fastest rate since comparable records began in 1994.

Travel-related stocks .FTNMX5750 surged again to advance 10% in just two days as some European countries started to ease travel restrictions.

Asset manager St James’s Place (SJP.L) rose 6.8% and was among the biggest gainers on the FTSE 100 after reporting a modest 1% gain in April net inflows.

British Land Co Plc (BLND.L) jumped 5.3% even as the real estate firm racked up a 1.1 billion pound ($1.36 billion) loss in its year ended March 31.

Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Saumyadeb Chakrabarty and Sherry Jacob-Phillips

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