FTSE 100 close: THG skyrockets 40 per cent while miners edge London index higher
London’s FTSE 100 kicked off a fresh week in muted fashion today, inched higher by investors snapping up shares in mining giants, while fashion firm THG skyrocketed more than 40 per cent on mounting takeover rumours.
The capital’s premier index added 0.1 per cent to close at 7,879.52 points, while the domestically-focused mid-cap FTSE 250 index, which is more responsive to sentiment toward the UK economy, climbed 0.23 per cent to 19,286.90 points.
Strong advances for big industrial companies pushed the FTSE 100 higher in the City in the morning, with appetite toward the sector fortified by a better outlook for demand for raw material prices on expectations of a Chinese economic growth spurt.
The index, which tracks the performance of the UK’s top companies, is heavily geared toward so-called “old economy” stocks, things like mining companies, meaning the FTSE 100 often flies when market sentiment improves toward industrial firms.
Rio Tinto jumped more than two per cent during morning exchanges, although gains trimmed, leaving the miner up more than 1.5 per cent.
“Stronger commodities have lifted stocks like Anglo American, Rio Tinto and BP towards the top of the UK index ahead of China’s closely watched economic growth figures on Tuesday,” Victoria Scholar, head of investment at fund manager interactive investor, said.
British retailer THG surged more than 40 per cent after news emerged today that US private equity firm Apollo has tabled a takeover offer. Analysts have said a weak pound has made UK companies cheap and attractive investment prospects.
Britain’s largest supermarket Tesco climbed more than one per cent today and to near the top of the FTSE 100, while fund manager abrdn anchored the index, shedding more than 2.5 per cent.
Investors are keen to see how bad lenders have been damaged by last month’s financial market volatility that laid waste to US tech lender Silicon Valley Bank and prompted a fire sale of Credit Suisse to its biggest rival UBS.
“Expectations for earnings are on the floor, so beats can be expected. Wall Street’s big banks delivered strong earnings last week, but they are the stronger ones,” Neil Wilson, chief market analyst at Finalto, said.
Sky News reported today that UK banking giant Barclays is poised to lay off around 100 staff in its trading arm. Its shares were down over two per cent in London today.
The pound notched one of its worst days in a long time against the US dollar, weakening around 0.45 per cent against the greenback, likely on a resurgence in expectations that the Federal Reserve will back another interest rate at next meeting on 3 May.
Forecasts from the EY Item Club out today claim the Bank won’t cut interest rates until Christmas and will also back a twelfth straight rise at its next meeting on 11 May, which should provide a boost to sterling.