London’s FTSE 100 kicked higher this today, driven by retailers offsetting a sharp sell off in BT shares after it said it will shed 55,000 workers over the next decade.
The capital’s premier index jumped 0.25 per cent to 7,742.29 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, climbed 0.43 per cent to 19,298.25 points.
Gains in the City today came despite telecoms giant BT plummeting more than five per cent after it set out this morning a transformation plan that will involve letting go of around two in five employees. It is trying to cut costs to boost earnings and please shareholders.
The firm said it plans to utilize AI tools to pick up the fired employees’ responsibilities. The announcement amplifies the wave of job cuts sweeping through the telecoms sector. It also will ditch engineers after its full-fibre rollout is completed by slated date of around the end of the decade.
“Just how bad is it for telcos? Vodafone said it would cut 11k jobs – more than a tenth of its workforce. Now BT say it will cut 40 per cent of its workforce by 2030. Maybe it’s AI, maybe it’s just plain necessary. Either way being a distributor of data is not working out,” Neil Wilson, chief market analyst at Finalto, said.
Elsewhere on the FTSE 100, luxury fashion firm Burberry also slumped around five per cent despite posting a 16 per cent sales increase, primarily driven by strong demand from Chinese consumers.
That performance also topped its projections. Analysts said the share price drop could have been caused by the sales overshoot not prompting Burberry to hike its profit guidance.
“The fact Burberry hasn’t lifted its guidance for the new financial year after reporting such a strong set of results, and reference to it being ‘mindful’ of the macroeconomic and geopolitical environment, appear to have been the trigger for some investors to take profits in the stock,” Russ Mould, investment director at AJ Bell, said.
JD Sports continued its sharp rise after it said yesterday profits could hit £1bn this year. Its shares climbed a shade under six per cent to top the FTSE 100.
Budget airline and FTSE 250-listed easyJet told markets this morning that its profits are being crimped by rising fuel costs, forcing its share price sharply lower at the open. The firm recovered some of those morning losses to close up nearly one per cent.
Mr Kipling maker Premier Foods surged to around the summit of the mid-cap index, advancing just under three per cent after bumping its dividends following a 13 per cent profit jump.
The pound took a tumble against the US dollar, weakening 0.58 per cent.