FTSE 100 consolidates early gains; US indices to open higher

  • FTSE 100 index gains 25 points
  • US indices to open higher
  • US stimulus hopes keep the bulls interested

12.25pm: US indices 

It looks like being a risk-on day in the US as hopes of progress on a fiscal stimulus package keep the bulls interested.

Spread betting quotes indicate the Dow Jones industrial average will rise 110 points to 28,536 while the broader-based S&P 500 should kick on 12 points to 3,459.

The tech-heavy NASDAQ Composite is seen advancing 167 points to 11,588.

Although the markets seem to be enthused by the prospect of a stimulus deal, Craig Erlam at OANDA is still not buying it.

“The Democrats have little reason to cede too much ground and the Republicans seem extremely reluctant. Democrats are unlikely to be blamed in the event that stimulus isn’t forthcoming, especially after Trump cancelled talks earlier this week, and they have a growing lead in the polls. They may find it easier to resume after the election, even if that comes at a cost now,” Erlam said, in a shocking assessment that implies politicians might take actions for political ends rather than the greater good of the people who voted them in.

“Of course, this may all be the usual brinkmanship but the fact that this is still happening in October, so close to election day and as large companies prepare to lay off thousands of workers gives me the impression there’s more to it. For that reason, investors may be a little over-optimistic and could pay the price short-term.

“That said, it’s interesting to see this optimism against the backdrop of Biden’s lead widening in the polls. Perhaps we’re focusing too much on stimulus prospects and not enough on the desire of investors not to see long, drawn-out and hostile legal challenges after the election. Should Biden’s lead continue to grow, it may be a rally of relief, rather than a celebration of the result, itself,” Erlam continued.

On the macroeconomic front, traders will be keeping an eye out for US wholesale inventories, where the consensus forecast is for a 0.5% increase, led by durables.

In London, the FTSE 100 was up 25 points (0.4%) at 6,003.

11.10am: Gfinity in pole position 

The Footsie is in a bit of a holding pattern, consolidating earlier gains.

London’s index of leading shares was 40 points higher (0.7%) at 6,018.

“The mood in Europe is largely bullish even though the number of new Covid-19 cases is rising at a fast rate. The prospect of some form of stimulus in the US is trumping the health crisis, even though a political settlement is far from agreed upon. Things are still up in the air when it comes to the relief package in the US, as President Trump is keen for smaller individual relief schemes, while Nancy Pelosi, the House Speaker, is driving for a large all-or-nothing package. Pelosi said she is hopeful that a deal can be struck and that is fuelling the broadly positive sentiment in Europe,” said David Madden, a market analyst at CMC Markets.

() was the top riser in London as the esports media group said it is putting itself up for sale as part of a strategic review to “continue on its current pathway towards profitability” targeted for the first quarter of the 2021 calendar year.

The shares shot up 30% to 4.35p.

Shares in the hospitality sector have had a hard time of it in recent months but there was a bit of cheer for investors in (), the pubs group.

Its shares were up 16% to 48.1p after the Competition and Markets Authority cleared the proposed joint venture, with Carlsberg – the best news the shareholders have received in the last few weeks … probably.

9.45am: Footsie on a Roll(s)

London’s index of leading shares has popped its head above 6,000, despite the UK economy growing more slowly than expected in August.

The FTSE 100 was up 32 points (0.5%) at 6,010 with aeroplane engine maker () leading the advance, with a 23% gain to 240.9p.

There’s been no stopping the stock this week; the share price has more than doubled, with investors getting back on board after the engineering giant finally announced its proposed recapitalisation eight days ago.

Investors are also chasing the shares of property stocks higher after PLC () said 62% of the rent that was due on September 29 was paid within five working days, compared to a 95% payment rate in the same period of last year.

Of the £42mln of payments outstanding, £9mln relates to customers who have withheld payment pending documentation of agreed concessions, LandSecs said.

Shares in LandSecs were up 3.1% at 568.8p while sector peer PLC () saw its shares head 34.0% higher to 381.9p after it said it will restart dividend payments next month.

Read More: FTSE 100 consolidates early gains; US indices to open higher

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