Raiders returning after a long weekend were in an upbeat mood today as the FTSE 100 index rose over 1%.
The rise came despite concerns of higher inflation, with Brent crude still above $120 a barrel after Thursday’s OPEC meeting failed to boost supplies.
US markets fell sharply on Friday as more evidence of a tight job market dampened hopes that policymakers may be able to halt interest rate hikes in the autumn.
FTSE 100 rallies, Melrose and Prudential jump 4%
GKN’s blue-chip owner revealed today that it is a £520 million bank in the United States as part of a historic deal.
Melrose Industries said the sale of the standing desk business Ergotron marked the final exit from the broader Nortek air management-to-home automation business it bought in 2016.
The FTSE 100-listed company, whose current interests span automotive, aerospace and powder metallurgy, said it doubled shareholders’ initial investment in Nortec and switched businesses itself.
It plans to announce how Ergotron intends to use the proceeds closer to the closing date of the deal, due in the autumn.
However, Melrose shares rose 4% or 5.45p to 138.85p as the move expects a further return of cash to shareholders on top of the £729 million awarded in September.
Melrose delayed the withdrawal in March because of the Ukraine war but said she hoped to resume payments as soon as possible.
Its shares, along with Rolls-Royce and Prudential, were near the top of the packed FTSE 100 riser board as traders returned to their desks in an upbeat mood after a long weekend.
The easing of Covid restrictions in China was a factor in the FTSE 100 rising 1.2%, or 91.71 points, to 7624.66, as Pru improved from 46p to 1064p and miners including Anglo American and Antofagasta improved 3%.
Brent crude was still above $120 a barrel after Thursday’s OPEC meeting failed to provide a meaningful boost to output, with BP shares rising 3%, or 12.45p, to 443.75p.
Elsewhere in the oil industry, shares of North Sea-focused producer Serica Energy rose 9% as it allayed fears over the impact of the government’s planned windfall tax.
The AIM-listed company, which operates the Bruce, Keith and Rum fields, explained that the levy is part of a package that includes significant investment incentives “designed to encourage companies like Serica to continue to reinvest profits”. Gone”.
Still short of the 400p seen in mid-April, Serica’s shares jumped from 21.5p to 273p.
For Eve Sleep shareholders, though, the 24% slide will lead to more sleepless nights after the mattress retailer warned it wouldn’t meet expectations for the current year. It has initiated a strategic review to secure a new owner or investment partner. Shares fell 0.35p to 1.3p.
OPEC plans to keep oil above $120 a barrel
Frustration over OPEC’s plans for a modest increase in monthly output rates at its meeting in Vienna last Thursday means Brent crude remains above $120 a barrel.
There were hopes that the oil cartel could exclude production affected by Russia’s sanctions from its calculations so that other countries would be able to pump more to ease upward pressure on prices.
OPEC’s failure to deflect from its current plans for July and August resulted in Brent posting a weekly increase, demand pressures continued as China eased Covid controls and the US driving season underway.
Asia markets allay concerns over US rate hike
Strong trading in Asia means European markets are starting the week on the front foot, despite heavy losses on Wall Street on Friday.
Beijing’s easing of COVID restrictions and speculation that the US would lift some of China’s tariffs in an effort to contain inflationary pressures contributed to gains for the Shanghai Composite and Hang Seng in Hong Kong.
The FTSE 100 index fell 75 points on Wednesday but is expected to open 68 points higher at 7,601 when trading resumes after a long weekend.
US futures markets are also pointing higher following Friday’s passage, when the S&P 500 fell 1.6% and the tech-focused Nasdaq fell 2.5%.
The deficit reflected fears of an aggressive monetary policy tightening by the Federal Reserve as labor market data showed the US economy added more than expected 390,000 payrolls in May.
The latest evidence of a tight jobs market came as Federal Reserve policymakers reiterated their resolve to get inflation back under control.
That included vice-chairman Lyle Brainard, who said it was hard to make a case for a rate stagnation in September after the expected half-point increase in June and July.
Much is likely to depend on the details of Friday’s inflation report, when the annual rate of the US consumer price index is expected to be close to last month’s 8.3%.
Credit: www.standard.co.uk /