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Friday 20 September 2019

Wall Street inspires London market rise after steep sell-offs

The FTSE 100 Index closed up 84.63 points at 7,177.06.

The FTSE 100 Index closed up 84.63 points, rebounding from Friday's session (Kirsty O'Connor/PA)
The FTSE 100 Index closed up 84.63 points, rebounding from Friday's session (Kirsty O'Connor/PA)

By Ben Woods, Press Association Chief City Correspondent

London’s top-flight index rallied higher on Monday, taking its cue from American markets as traders tentatively re-entered the fray following a number of brutal sell-offs last week.

The FTSE 100 Index closed up 84.63 points at 7,177.06, rebounding from Friday’s session when the top tier was dragged 78-points lower by fears of potential interest rate rises across the globe.

Concerns that rising inflation may cause central banks to tighten monetary policy has left investors spooked, leading to volatile swings and trillions of pounds to be wiped off global markets.

However, Wall Street was enjoying a bright session on Monday, with the Dow Jones Industrial Average and the S&P 500 rising 1.6% and 1.3% respectively at the time of the London market close.

In European markets, France’s Cac 40 lifted by 1.2% and Germany’s Dax chalked up a 1.5% rise.

On the currency markets, the pound was marginally ahead against the US dollar at 1.38, while sterling slipped 0.1% to 1.12 versus the euro.

Connor Campbell, Spreadex financial analyst, said the UK currency could be in line for a tough session on Tuesday as markets react to the latest inflation data.

He said: “The morning’s UK inflation reading is expected to slip from 3.0% to 2.9% month-on-month; even if accurate that very slight decline might not be enough to reassure investors fearing the increasingly hawkish tones of the UK’s central bankers.”

In oil, Brent crude was up 1.2% to 63.32 US dollars a barrel as the rampant swings on equity markets showed signs of easing.

Fiona Cincotta, City Index’s senior market analyst, said: “Oil had been hit by concerns over increasing US oil production, a stronger dollar last week and general risk aversion in the market as equities sold off.

“However, whilst the dollar has eased back and oil has rallied today, there are still a number of factors working against oil which could still weigh on the price going forward.”

Focusing on UK stocks, Barclays rose after the Serious Fraud Office (SFO) charged the banking giant over a 3 billion US dollar (£2.2 billion) loan given to the State of Qatar.

It extends a charge brought against the parent firm for “unlawful financial assistance” last July.

At the time, the SFO had not yet decided whether to charge the Barclays Bank unit over the loan as well. Barclays Bank has now been charged with the same offence.

Both Barclays and its bank unit have said they will defend themselves against the charges. Shares were up 0.4p to 193.3p.

Away from the top tier, Game Digital surged more than 7% after tracksuit tycoon Mike Ashley struck a deal with the firm to introduce e-sports concessions into Sports Direct stores.

The billionaire retailer, who holds a 26% stake in Game, has now picked up 50% of the high street chain’s Belong e-sports division for £3.2 million.

So-called e-sports involve professional gamers battling it out in front of crowds at events such as Insomnia. Shares were up 3p to 41p.

The biggest risers on the FTSE 100 Index were Evraz up 19.2p to 352.3p, NMC Health up 136p to 3,246p, Shire up 122p to 3,197p, Rio Tinto up 107p to 3,895.5p.

The biggest fallers were Severn Trent down 34.5p to 1,786p, United Utilities down 8.6p to 684.8p, Paddy Power Betfair down 70p to 8,080p, SSE down 7.5p to 1,182p.

PA Media

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