FTSE 100 close: London markets close higher after sliding for three days straight
London’s FTSE 100 jumped into the green on Thursday, following three days where the capital’s blue-chip index slid.
The FTSE 100 climbed 0.53 per cent to close at 7,451.54 while the FTSE 250 ended 0.61 per cent higher at 17,599.98
The FTSE’s gains came despite data showing a stronger than expected labour market in the US.
“Initial jobless claims edged up last week but remain close to 200,000, signaling that there are still very few layoffs,” Michael Pearce, lead US economist at Oxford Economics said.
“We expect some increase in claims over the coming months as job growth slows further but, for now, labor market conditions are still easing without a significant rise in unemployment,” he continued.
One of the FTSE 100’s biggest riser was Britain’s biggest supermarket Tesco, up around 3.7 per cent. It reported a strong set of results yesterday and raised its outlook for the rest of the year.
On the FTSE 250, which is more aligned with the UK domestic market, Volution Group’s shares were up over nine per cent after the open, following reports it had a bump in profits for the year. It provides ventilation products.
Metro Bank’s shares were sent plummeting around 30 per cent, after it was reported they were drafting in investment bankers, as it looked at a major capital rise.
Its share price has sunk more than 50 per cent in recent weeks, with reported in the Financial Times suggesting the bank is looking to raise £600m.
Imperial Brands, the tobacco giant behind Lambert & Butler, Winston and Gauloises, also saw its shares rise this morning, up by about 3.9 per cent. This came off the back of the firm saying it is on track to deliver its full-year guidance thanks to high prices of cigarettes and demand for tobacco alternatives.
The company, which also makes Golden Virginia tobacco, said that strong pricing led by the rising costs helped offset historic declines led by fewer people smoking.
This comes after Rishi Sunak announced the gradual banning of smoking at the Conservative party conference, which dented shares for cigarette firms such as Imperial and British American Tobacco.
The global bond rout deepened on Wednesday sending borrowing costs on some of the longest-dated UK government debt to their highest levels in decades.
CMC Markets analyst Michael Hewson said: “European markets stabilised somewhat yesterday, although the FTSE100 slid for the third day in succession due to a sharp slide in commodity prices, which weighed on the big caps of basic resources and energy.
Hewson commented that “there was a respite in the big surge we’ve seen in bond yields, which retreated from intraday and multiyear highs”.
He added that a “rebound in US markets has translated into a rebound in Asia markets and looks set to translate into a positive start for European markets this morning”.
Russ Mould, investment director at AJ Bell, said: “The market sell-off which saw government bond prices fall and yields rise has taken centre stage this week, and investors continue to watch the 10-year Treasury yield like a hawk. Having dipped slightly on Wednesday, the yield has since crept back up to 4.75% as investors readjust portfolios to align with the prospect of interest rates staying higher for longer.”
“The bond market wobble has knocked confidence slightly, but not enough to put long-lasting fears among investors as nearly all of the major indices in Asia and Europe traded higher on Thursday.
“It looks like a typical knee-jerk reaction by investors — there have been plenty of signs to suggest central banks will continue with their fight against inflation by keeping rates high, but a lot of people seem to have been too complacent and expected a sudden drop in rates.”