London markets make ‘solid’ gains as trading optimism continues
The FTSE 100 delivered another “solid” performance as it closed in the green on Wednesday despite tempering trading sentiment towards the end of the day.
It was once again bolstered by improving travel and retail firms, which remained optimistic about plans to loosen current lockdown restrictions.
London’s top flight closed 76.49 points higher at 6,144.25p at the end of trading on Wednesday.
Michael Hewson, chief market analyst at CMC Markets UK, said: “European markets have seen another solid session today, rallying for the third day in a row, over optimism over the lifting of lockdown restrictions, with airlines, travel and retail stocks all moving higher.
“The afternoon session saw some tempering of today’s enthusiasm on a report from the South China Morning Post that said China was ready to hit back on the US over any punitive action with regard to Hong Kong.
“Until then markets had been content to ignore the risks of the rising tension between the two over the implementation of a new security law, and the prospect of the US implementing economic sanctions against key Chinese officials.”
The markets had also been buoyed by plans laid out by the European Commission for a 750 billion euros recovery fund – of which 500 billion euros would be in the form of grants.
The German and French markets moved higher as a result, while the Euro also made gains.
The German Dax increased by 1.33%, while the French Cac moved 1.79% higher.
Across the Atlantic, the Dow Jones pushed higher as well, but slipped back following the reports of Chinese trade tensions.
Meanwhile, sterling was one of the day’s worst performing currencies after Sir David Frost, the UK’s chief Brexit negotiator, said that the current EU mandate for talks would make it difficult to arrive at an agreement the UK can accept.
The value of the pound slid 0.86% versus the US dollar at 1.223, and was down 0.76% against the euro at 1.114.
Retail groups including JD Sports and Primark-owner ABF made significant gains on Wednesday as high street stores moved closer to reopening their doors on June 15.
Meanwhile, airlines had another strong showing amid hopes of loosening travel restrictions, with easyJet pushing higher.
In company news, Auto Trader saw shares move higher after it said it will slash its prices in June as the Government allows car dealerships to open again.
It closed 15p higher at 550p after saying it will give customers at 25% price cut.
Bike and car accessory retailer Halfords dipped after it revealed plans to reopen 53 more stores. Shares in the company moved 6.4p lower to 163.6p.
Elsewhere, troubled guarantor lender Amigo fell after it said a potential suitor is ready to table a bid for the firm, but it is still waiting for a response from its controlling shareholder over the move. It slipped by 1.2p to 21.2p.
The price of oil slipped from a two-month high on the back of an IEA report warning that global energy investment could well fall by as much as 20% this year.
The price of a barrel of Brent crude oil decreased 3.43% to 34.9 US dollars.
The biggest risers on the FTSE 100 were Melrose, up 12.7p at 118.65p, Meggitt, up 28.8p at 304.8p, M&G, up 12.7p at 140p, and Rolls-Royce, up 31.3p at 346.1p.
The biggest fallers of the day were Barratt Developments, down 30.2p at 502.8p, AstraZeneca, down 343p at 8,329p, Aveva, down 146p at 3,821p, and Ocado, down 70p at 2,037p.