FTSE 100 jumps as bank and energy stocks gain
BANKING and energy stocks lifted Britain’s blue-chip FTSE 100 on Wednesday, as investors bet on more U.S. stimulus and crude oil prices hit a 11-month high after Saudi Arabia agreed to cut more output than expected.
The exporter-heavy FTSE 100 index rose 1% in its third consecutive session of gains. Lenders HSBC, Barclays and Standard Chartered provided the biggest boost with gains between 5.4% and 6.5%.
Investors globally watched the tight election race in Georgia for the control of U.S. Senate, with markets widely bracing for a Democratic sweep that could result in a bigger fiscal stimulus.
Oil heavyweights BP and Royal Dutch Shell rose almost 4%.
Saudi Arabia, the world’s biggest oil exporter, said it would make additional, voluntary oil output cuts of 1 million barrels per day in February and March. [O/R]
Investors also looked past the near-term effects of the new lockdowns imposed to curb a surge in coronavirus cases to bet on a quicker economic recovery.
“There is huge liquidity being infused by the central bank which will continue to support markets in addition to an extremely positive 2021 growth outlook,” said James Gutman, head of investment portfolios at Dolfin Financial.
“Investors have priced in continued fiscal support and have looked past the near-term risks arising out of the new lockdowns imposed.”
British stocks began the year on a positive note, boosted by fresh stimulus, while the government’s aim to vaccinate around 14 million of the most vulnerable against the COVID-19 virus by mid-February also boosted sentiment.
In company news, the world’s largest exhibitions group Informa Plc rose 2.1% even after forecasting a more than 70% plunge in its 2020 profit.
British baker and fast food retailer Greggs traded higher at 7.8% after it said sales decline had slowed, but warned it does not expect profit to return to pre-pandemic levels until 2022. – reuters.com