FTSE 100 Reaches One-Week High with Commodity Stocks

On Monday, the FTSE 100 index of the UK was able to record a high of more than one week, as commodity prices declined due to an easing of COVID-19 curbs in China and the possibility of global funding for infrastructure. This gave a lift to stocks of major mining and oil companies.

FTSE rises with risk sentiment

There was a 0.8% in the FTSE 100 index in Britain, since it is commodity-heavy, allowing it to climb to the highest level seen since June 16th. As for the FTSE 250 index, which is domestically focused, it recorded a gain of 1.2%.

Late last week, there had been a rally on Wall Street, which gave risk sentiment a boost. Likewise, Monday also saw the prices of iron ore and copper go up, thanks to the easing of COVID-19 curbs in the Chinese city of Shanghai and the lifting of testing mandates in several others.

Market analysts said that the FTSE 100 has a spring in its step at the beginning of the week because of the increase in enthusiasm seen in global equities. The major gainers on the FTSE 100 index were mining companies, with Glencore, Rio Tinto, and Anglo American, all recording gains of more than 3%.

This came after the G7 countries announced that $600 billion worth of public and private funds would be raised in five years for building the infrastructure required by developing countries. Analysts said that this scheme had been introduced for countering the Belt and Road initiative launched by China and could boost spending, thereby increasing demand for global commodities.

Individual stocks

There has already been a 4% decline in the FTSE 100 index in this month and it was on course to post its first monthly decline in the last four months. This is because blue-chip stocks are taking a beating because of the increasing fears of recession brought on by the aggressive hikes in interest rates for staving off inflation.

In individual stocks, there was a 2.8% rise in CareTech, which provides care and residential services. The UK-based company agreed to an acquisition deal worth 870.3 million pounds with a consortium headed by Sheikh Holdings.

A 5.6% jump was also seen in Carnival Corp, as it was able to extend the gains it made on Friday. This occurred after the leisure travel company stated that the current quarter was likely to have a positive core profit, even in the face of rising costs. Likewise, there was also a 1.2% gain recorded in BAE Systems after it got a contract worth $12 billion. The defence company was extended this contract by the Department of Defense in the United States.

Market analysts have said that while stocks might be seeing a positive trend right now, it is going to be short-lived, as there is a great deal of economic data due this week. Plus, until central banks come down from their hawkish stance, markets are going to remain volatile, which means the rally may not last long.

Leave a Reply

Your email address will not be published. Required fields are marked *