Financial firms help FTSE climb despite higher borrowing
Banks and financial stocks helped propel the FTSE to gains on Tuesday as the previous day’s hesitation among traders faded.
Federal Reserve Chief Jerome Powell’s optimistic outlook on Monday evening helped global markets get off to a strong start to the day.
The UK blue chip index posted gains as a result, although increased borrowing and record price increases by UK manufacturers dampened optimism.
The FTSE 100 ended the day up 34.33 points, or 0.46%, at 7,476.72 points.
“Rising bond yields continue to support financial stocks around the world, and after recent strength in commodity names, today is the turn of the FTSE 100 financial contingent to rise,” said Chris. Beauchamp, chief market analyst at IG.
“Still, after the huge rebound in early March, the index, and markets in general, are going to need a major new catalyst to lift it from here.”
German markets also saw financial companies play a major driving role, with the value of Deutsche Bank rising.
The French Cac was up 0.87% and the German Dax was up 0.84% at the end of the session.
Across the Atlantic, Wall Street shrugged off losses in the bond market as the Nasdaq 100 hit a one-month high.
The pound was robust ahead of February’s inflation reading from the Office for National Statistics, but lost ground against a buoyant dollar.
The pound fell 0.05% against the dollar to 1.325, and rose 0.01% against the euro to 1.203.
In corporate news, B&Q and Screwfix’s parent company Kingfisher was at the bottom of the FTSE 100 at the end of the session after posting a sharp decline in sales in the three months to the end of January.
Bosses said part of the fall, which included a rare drop in Screwfix stores, was due to strong comparisons with a year earlier, when closures saw households turn to DIY.
Kingfisher shares fell 18.4p to 272.9p.
Shares of Trustpilot plunged after the online review platform revealed mounting losses despite an increase in its booking activity.
The company’s shares ended down 24p to 137.8p per share after posting a pre-tax loss of $25.9m (£19.6m) in 2021 as administration costs took a hit. than doubled during the year.
Shares of JD Sports gained momentum after sportswear giant and major supplier Nike reported an increase in third-quarter revenue in the United States.
Nike posted a 5% rise in the three months to February, supported by strong growth in its Nike Direct division, helping to spark optimism of a strong period for the sector. JD finished 4.4p higher at 153.3p as a result.
The price of oil briefly hit its highest level in more than a week before falling back on speculation that the EU is still a long way from agreeing to sanctions on Russian oil imports.
Brent crude fell 0.98% to US$114.49 a barrel as London markets closed.
The biggest risers in the FTSE 100 were Prudential, up 44.5p at 1,128.5p, Aviva, up 14.4p at 440.7p, Lloyds, up 1.61p at 50.24p, HSBC , up 15.8p to 516.6p, and NatWest Group, up 6.7p to 336.6p.
The biggest fallers were Kingfisher, down 18p at 272.9p, Auto Trader, down 30p at 646.8p, Fresnillo, down 29p at 719p, Endeavor Mining, down 45p at 1,865p, and CRH, down 77p to 3,308p.