September’s US inflation figures and Federal Reserve minutes showing policymakers are prepared to cut broad economic support before year-end didn’t rock Wall Street overnight. However, current inflationary pressures are not easing, with Brent crude oil and natural gas prices both rising.
The stable week for the London market continued as stronger mining and oil stocks keep the FTSE 100 index in positive territory.
In company news, Dunelm said recent sales growth has been encouraging as it has been held up by the city’s recent increase in profit forecasts, but shares in defense firm Qinetiq have fallen by 9% after sales in the United States were affected by Biden’s transition to presidency and the end of the counter-insurgency missions in Afghanistan.
A familiar story of a surge in the price of copper and a multi-year high for oil has ensured that heavy commodity stocks held up the recent rally in the FTSE 100 today.
Markets came out of their nervousness with a week without major economic shocks, with US and Chinese inflation figures and indications from the Federal Reserve regarding the potential start of the reduction in November containing few surprises.
The FTSE 100 index rose 53.89 points to 7,195.73, led by miners as a weaker US dollar and economic resilience pushed metal prices higher. Gains for copper and iron ore over the past week now stand at 7%, while Brent crude added 1% overnight to over $ 84 a barrel.
The gains reverse recent fears about slowing economic growth in China and the potential fallout if real estate giant Evergrande collapses.
AJ Bell Chief Investment Officer Russ Mold said: “A slowing global economic recovery could easily trigger a decline in commodity prices in the near term, but for today it looks like investors are very risky. “
Glencore, which is exposed to the global decarbonization effort through positions in copper, cobalt and zinc, rose 3% or 9.6p to 381.85p and is now up 14% in the month latest. The price of zinc has jumped another 3% today and is up 15% on a weekly basis after one of the world’s largest smelters cut production in Europe due to rising prices for the ‘energy.
Anglo-American stocks led the FTSE 100 index, rising more than 3% or 94.5p to 2878.5p after the price of platinum rose.
The FTSE 250 index continued its recent rebound, improving 157.83 points to 22,791.5 on a busy day for trade updates. Recruiting firm Hays rose 4% or 6.2p to 168.5p, while electronics firm DiscoverIE added 5% following its better-than-expected statement.
Saber Insurance, which sells policies through brokers and its direct brands Go Girl and Insure 2 Drive, fell 2% or 4.8p to 190.2p in the FTSE All-Share after it said the takeover Auto insurance prices had been slightly slower than expected. .
Former Defense Ministry research arm Qinetiq lowered its shares by 9% today as it revealed it was experiencing technical and supply chain issues on a large, complex program.
The defense and security specialist, which generates a third of its revenue outside the UK, now works with anonymous clients and supply chain partners with the aim of mitigating risk to less than £ 15million.
He has also been affected in the United States by Biden’s transition to presidency and the end of the country’s counterinsurgency missions in Afghanistan, as well as delivery and supply chain issues related to Covid.
Hampshire-based Qinetiq, which was formed in 2001, now expects an underlying operating profit margin at the low end of its expected range of 11-12%. It is also prepared for a potential depreciation of the guidance on the major complex program.
Managing Director Steve Wadey, however, remains confident in the medium-term outlook, having generated “excellent” order intake and a series of major contracts won.
The permanent recruiting market is the ‘hottest’ it has been in the UK since 2007, with pay increases of up to 20% in some sectors in demand, said the chief financial officer of the hunter giant. Hays heads.
Paul Venables told the Evening Standard: “For most businesses, the extent and speed of recovery from the pandemic has been much better than they might have expected. “
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The FTSE 100 index is up 37.86 to 7,179.68 amid a strong session for mining stocks, with Anglo American and Glencore setting the fastest pace after gains of more than 2%.
The domestically-focused FTSE 250 index improved 150.18 points to 22,785.45, led by the former oil company Premier Harbor Energy after oil prices edged up overnight.
Electronics company DiscoverIE also rose 5% following a better-than-expected business update.
However, the actions of defense specialist Qinetiq slipped 9% as he revealed his performance in US Global Products had been affected by Biden’s stint as president and the shift in priorities of counterinsurgency missions in Afghanistan. threats in the Indo-Pacific.
Saber Insurance, which sells policies through brokers and its direct brands Go Girl and Insure 2 Drive, said the recovery in auto insurance prices has been slightly slower than expected as restrictions put on it. at Covid relax.
Its business is heavily focused on new business and new drivers, so the backlog of driving tests and long delays in new car registrations have not helped.
Saber said, “We have chosen not to engage in inappropriate price discounts to drive volume during this period, instead of maintaining pricing discipline in order to preserve the strength of the business over the medium term. “
He expects prices to rise over the coming year as the Covid discounts applied to policies for periods of reduced traffic roll out and the industry responds to a significant period of cost inflation. . Saber shares fell 2p to 193p in the FTSE All-Share.
A difficult start to trading for Czech trucking services company Eurowag and the decision by tile firm Marley to postpone its float due to market volatility have rocked the outlook for initial public offerings (IPOs) in recent days.
Radiator company Stelrad challenged this nervousness today to confirm that its £ 350million London float will continue into next month, saying “the interest we have received from potential investors has been significant”.
Rubix, whose products help maintain the factories and factories of some of Europe’s largest industrial companies, has also announced that it is considering an IPO in London’s main market.
Banking giant JP Morgan Chase got off to a good start to Wall Street’s third quarter earnings season yesterday when it released better-than-expected results, driven by the recent M&A boom and the release of more loss reserves on ready.
Net income rose 24% to $ 11.7 billion, driven by a 30% increase in revenues for its investment banking and markets division.
Managing Director Jamie Dimon said, “JPMorgan Chase has delivered strong results as the economy continues to show good growth, despite the moderating effect of the Delta variant and supply chain disruptions. “
Shares have risen 28% so far this year, but closed more than 2% cheaper yesterday amid weaker performance in the banking sector.
Bank of America, Citigroup and Morgan Stanley are expected to release their results later today.
European stock markets are expected to open higher this morning after a stable performance of US and Asian markets overnight.
The focus continues to be on inflation after it emerged that U.S. consumer prices rose 0.4% on a monthly basis in September, the fifth time in the past seven months that the figure exceeded the median estimate.
Deutsche Bank senior analyst Jim Reid said the publication of the CPI only added to speculation that the Federal Reserve may be forced to hike rates earlier than expected.
He added: “Investors are now estimating nearly four hikes by the end of 2023, which is a full hike more than they were a month earlier. “
The nervousness was evident in the markets overnight as gold’s traditional inflation hedge posted its best daily performance since March.
China weathered the trend of inflation overnight with official figures showing the annual rate fell in September to 0.7% from 0.8%. This was, however, offset by a rise in the producer price index to 10.7%, the highest since records began to show inflationary pressures persist in the Chinese value chain.
Oil prices edged up slightly overnight to leave Brent futures at $ 83.73 and West Texas crude oil at $ 80.96.
The rise came despite OPEC’s monthly oil market report downgrading its forecast for global oil demand this year. European natural gas prices also rose 9%, as they continue to reduce some of the declines following Vladimir Putin’s intervention last week.
According to CMC Markets, the FTSE 100 index is expected to open 35 more points at 7,176.