UK shares climb on airlines, US tech bounce

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(Reuters) -Britain’s main stock indexes rose on Friday, aided by positive sentiment on Wall Street following upbeat earnings from technology majors, while most airline stocks advanced after Wizz Air reported a jump in January traffic.

The blue-chip FTSE 100 climbed 0.4%, while the mid-cap FTSE 250 added 1.0%.

Wizz Air rallied 9.4% to become the top gainer in the FTSE 250 after the carrier reported a 14.2% increase in passenger traffic in January. Shares in EasyJet added 3.6% and British Airways-owner IAG climbed 2.3%.

Friday’s gains came after U.S. tech giants Meta Platforms and Amazon.com issued better-than-expected results, putting Wall Street on course for a strong open. [.N]

Traders are now awaiting monthly U.S. payroll data for clues on the rate trajectory after the Federal Reserve shot down market expectations of early interest rate cuts.

“You have full employment. There’s a lot of good reasons for why the Fed would stay a little bit cautious here,” said Peter Garnry, head of equity strategy at Saxo Bank.

“November and December (job openings) figures showed that the labour market tightness actually increased. The number of job openings relative to unemployed people in the U.S. economy, the rates that the Fed is looking at, has tightened.”

It has been a mixed week for UK equities as investors trimmed bets on the extent of interest rate cuts from the Bank of England after the central bank on Thursday reiterated that policy would need to stay “restrictive for sufficiently long.

The British public’s expectations for inflation increased in January on worries about disruption to shipping, according to a survey published by Citi/YouGov.

Among other stocks, Sainsbury and Tesco gained 2.8% and 2.1%, respectively, after Morgan Stanley upgraded the UK grocers, saying they are likely to benefit from a “volume-led top line growth” as inflation moderates.

BP slipped 2.0% after the oil and gas company shut down the Whiting, Indiana refinery of hydrocarbons – its biggest in the Midwest – following an apparent power outage.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Sherry Jacob-Phillips and Eileen Soreng)

By Sruthi Shankar

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