By Jack Mendel
London’s FTSE 100 enjoyed a strong end to the week, as the global stocks rally continued with a stable showing from Wall Street last night.
The capital’s premier bluechip index started the day well at over 7,727 points, more than 0.89 per cent up on the open. Its biggest risers were Burberry and Flutter, both about two per cent up by 9.30.
FTSE was lifted this morning after a strong week for the index, and positive news for other key markets, such as the US and European Union.
Overnight,Wall Street rose after a blizzard of reports suggested the US economy is still humming, though inflation may be too. The S&P 500 climbed 0.8 per cent for its best day in two weeks, while the Dow Jones Industrial Average rallied 331 points, or 1 per cent , and the Nasdaq composite added 0.8 per cent.
While the reports bolstered hopes the US economy will avoid a deep recession, the strength underlying them could also add upward pressure on inflation.
However, British chipmaker Arm took the headlines, with shares in SoftBank’s firm soaring almost 25 per cent above their Nasdaq debut price on Thursday, rekindling investor hopes for a turnaround in the moribund market for initial public offerings (IPO).
This comes after theEuropean Union lifted interest rates for the 10th consecutive time this week, taking them to a 22-year high, signalling that it still considers inflation a bigger risk than concerns over a slowdown.
“A solid showing from Wall Street last night put investors in a good mood and that positivity extended across Europe and most of Asia on Friday,” says Russ Mould, investment director at AJ Bell.
“Helping to lift spirits was a strong debut from Arm on the US market and the ECB signalling the end of its policy tightening. That’s exactly what investors want to hear, namely the end of the rate hiking cycle and excitement around growth stocks once again.
On London, he said a “A 0.6 per cent rise in the FTSE 100 to 7,719 put the UK index at its highest level since May. Consumer cyclicals, healthcare, industrials and basic materials led the way.
This morning FTSE 250-listed Warhammer owner Games Workshop said its trading performance for the three months ending 27 August shot past expectations set by its board, as the company is spurred by a mega-deal with Amazon.
Following its positive results, investors were buoyed with its share price zooming up more than 10 per cent by 10am.
Mould said its shares rose “on a bullish trading update and another dividend payment. The fantasy figures specialist is typically short on detail, merely telling investors that trading is going well without divulging further information. This is true to form for the company and anyone owning the shares has to trust the business is just getting on with it.”
Meanwhile, London was encouraged after figures from the Bureau of National Statistics showed that Chinese retail sales and industrial production grew more than expected in August.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “A short, sharp economic recovery in China would help underpin confidence globally. As an export destination for 40 countries, and the largest consumer of commodities in the world, its economic fortunes are closely intertwined with others.
“There are of course some hurdles still to clear, including a creaking real estate market and record unemployment, but this first step should be taken as a positive sign.”
