FTSE 100 makes sprightly start to proceedings; oilers in demand

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  • FTSE 100 up 32 points

  • Nasdaq in record territory

  • Fed minutes awaited

Heading into late afternoon, the FTSE 100 had once again lost some momentum but was still in the green with a 32 point gain at 7,133 at around 3.25pm.


The biggest blue-chip risers remained mostly unchanged from earlier in the day, with the miners still reaping rewards from the upsurge in commodities prices.


Anglo American maintained the top spot with a 4.1% rise to 3,020p, followed by Antofagasta which jumped 3.4% to 1,452p.


At the other end of the scale, Entain was still the biggest faller, sinking 3.5% to 1,804p.


Over in the US, the Nasdaq was heading for its third record finish in a row, with the index up 0.26% at 14,701 in mid-morning trading in New York after hitting an all-time high of around 14,731 at the opening bell.


The record performance for the index is being driven heavily by rises in major tech stocks including Apple Inc (NASDAQ:APPL), Amazon Inc (NASDAQ:AMZN) and Google parent Alphabet Inc (NASDAQ:GOOGL), all of which are up today.


This ascent is also good for London-listed and tech-stock focused Scottish Mortgage Investment Trust PLC (LON:SMT), which was up 1% at 1,336p in late afternoon trading in the UK.


2.45pm: Wall Street moves higher


Wall Street got off to a positive start on Wednesday morning, with the Nasdaq moving into record territory in early deals.


Shortly after the opening bell, the Dow Jones Industrial Average was up 0.08% at 34,606 while the S&P 500 climbed 0.22% to 4,353 and the Nasdaq rose 0.38% to 14,719.


While markets appear to be in a good mood so far, that could all change when the latest Fed minutes appear later as fears linger of a hawkish shift at the central bank after it said it expects two interest rate hikes in 2023 at the conclusion of its June meeting, as opposed to nothing until 2024 previously.


Back in London, the FTSE 100 had perked up following Wall Street’s positive open, rising 39 points to 7,140 at around 2.40pm.


1.30pm: FTSE 100 gains shrink


As the London session entered mid-afternoon, the FTSE 100 was showing more signs of losing momentum, up just 18 points at 7,118 just before 1.30pm.


Commodities prices were continuing to boost miners to the top of the blue-chips, with Anglo American the biggest riser in the afternoon with a 3.5% gain to 3,001p.


The biggest faller, meanwhile, was Ladbrokes owner Entain PLC (LON:ENT), which sank 2.7% to 1,819p in what seemed to be ongoing fallout from its failure to acquire the wagering business of Australian gambling group Tabcorp.


Market sentiment may also be a little shakier this afternoon following a new report from the Organisation for Economic Co-operation and Development (OECD), which warned a recovery in the UK’s jobs market could be delayed until the end of 2023 as the phasing out of the furlough scheme later this year caused a spike in unemployment, reversing previous gains.


12.20pm: US stocks to start on the front foot


The main indices on Wall Street are expected to start Wednesday’s session in the green as traders await the minutes of the June meeting of the Federal Reserve’s Federal Open Market Committee (FOMC).


Spread-betters are predicting the Dow Jones Industrial Average will open around 25 points higher while the S&P 500 is expected to rise 8 points and the Nasdaq to jump 81 points.


“All eyes will be on the FOMC minutes due to be released later today. The minutes are from the mid-June Fed meeting, which saw the US central bank adopt a more hawkish stance. At the June meeting, the Fed announced it expects two rate hikes in 2023, as opposed to nothing until 2024 previously”, said Sophie Griffiths at OANDA.


“Should the minutes have a strong hawkish tilt, they could unnerve investors. However, this meeting was three weeks ago and could be now considered stale, particularly in light of the tick higher in unemployment in the June NFP report and yesterday’s weaker ISM services data”, she added.


Back in London, the FTSE 100 was managing to hold steady in lunchtime trading, rising 31 points to 7,131 at around 12.15pm.


11.45am: Wise valued at GBP8bn following direct listing


The hotly anticipated listing of money transfer firm Wise PLC (LON:WISE) appeared to have been a success shares opened for trading on the standard segment of the main market at 11am.


Rather than a traditional IPO, the firm opted for a direct listing of its 994mln shares on the exchange, meaning the shares were given an estimated value from the LSE rather than a fixed IPO price, so the exchange can hold an auction.


At the opening of post-auction trading in late morning, the shares were priced at around 800p each, giving the firm a valuation of around GBP8bn, bang in the middle of its estimated valuation range of between GBP7bn-GBP9bn.


The pricing followed news from the firm that OwnWise, the shareholder reward programme for Wise customers, is oversubscribed with over 125,000 expressions of interest in the UK and EU.


Back in the blue-chips, the FTSE 100 had lost a little steam in late morning but was still up 34 points at 7,134 at around 11.40am.


10.25am: FTSE 100 inches higher


As the morning session progressed in London, the FTSE 100 was continuing to inch higher, rising 44 points to 7,145 shortly before 10.30am.


Miners were sitting at the top of the pile of blue-chip risers mid-morning, with Antofagasta PLC (LON:ANTO) notching the biggest gain of 2.8% to 1,443p followed by BHP PLC (LON:BHP) which rose 2.7% at 2,191p.


Other FTSE 100 miners were also on the up, with Anglo American PLC (LON:AAL) jumping 2.6% at 2,976p and Rio Tinto PLC (LON:RIO) rising 2.2% to 6,014p.


The miners are mostly tracking an increase in commodity prices amid predictions that a new ‘supercycle’ for the sector is beginning.


9.39am: UK house prices dip in June


House prices in the UK dropped 0.5% from May to June, the first monthly decline since January as the effects of the gradual phasing out of the stamp duty holiday began to bite.


According to data from Halifax, one of the UK’s biggest mortgage lenders, annual house price growth rates have fallen to 8.8% from a 14-year high of 9.6% reached in May.


However, the slight dip in home prices does not seem to have phased the LSE’s main housebuilders, with shares in Redrow PLC (LON:RDW) up 3.4% at 650.6p in early trading after the company reported that housing orders remain ‘very strong’ and it expects revenues to rise back above GBP2bn in the current year.


Redrow’s FTSE 100 peers were also on the rise, with Taylor Wimpey PLC (LON:TW. up 1.6% at 166.1p while Persimmon PLC (LON:PSN) jumped 2% to 3,092p.


This may be due to the fact that despite the decline, housing market growth is expected to continue, according to some analysts.


“The tapering of the stamp duty holiday at the end of June should provide a clearer idea of how strong underlying forces supporting house prices are. Better-off, home-owning households are emerging from the pandemic in relatively good financial shape. Taken together with changing housing preferences, very low mortgage rates and a strong economic recovery, it suggests a correction in property prices is unlikely in the near future”, said EY ITEM Club’s Martin Beck.


The FTSE 100 was also in the green, rising 37 points to 7,137 shortly after 9.30am.


8.35am: FTSE 100 makes sprightly start


The FTSE 100 was perkier than anticipated, though, according to market watchers, traders were lacking any real inspiration ahead of the half-year reporting season.


Perhaps they also have half an eye on the football later.


On the market, the oilers led the pack buoyed by resurgent crude prices.


Shell (LON:RDSA) advanced 2.3% to top the Footsie, while BP (LON:BP.) was up 1.5%.


BHP (LON:BHP), up 2.1%, and Rio Tinto (LON:RIO), ahead 1.8%, rose along with iron ore prices.


Heading the Footsie fallers was Ocado (LON:OCDO), down 3.3%, which appeared to be impacted by a post-results reassessment of the grocer-turned-tech group’s prospects.


Looking ahead, US Federal Reserve minutes, out after London closes, will likely dominate sentiment in the coming days if their tone is particularly cautionary on inflation.


6.50 am: Quiet start seen


The FTSE 100 is expected to open slightly higher on Wednesday as investors await the minutes from the latest Federal Reserve meeting.


Spread betters IG expect the blue-chip index to open up around 4 points after ending Tuesday’s session 64 points lower at 7,100.


The cautious start follows a mixed performance on Wall Street overnight with the Dow Jones Industrial Average closing down 0.6% at 34,577 while the S&P 500 dropped 0.2% to 4,343. The Nasdaq was the positive outlier, rising 0.17% to a record 14,663.


Markets in Asia were more negative this morning, with Japan’s Nikkei 225 down 1.2% while Hong Kong’s Hang Seng sank 0.81%.


Investors may be looking to keep their powder dry today ahead of the minutes from the June meeting of the US Federal Reserve’s rate-setting Federal Open Market Committee (FOMC).


Key points in the minutes are likely to be those focused on the central bank’s decision to forecast two interest rate hikes by the end of 2023, as well as any commentary of the outlook for the economy.


On currency markets, the pound was up 0.01% at US$1.38 against the dollar, although there may be some movement based on any Fed commentary about the macroeconomic picture going forward.


Around the markets:


Sterling: US$1.38, up 0.01%


Brent crude: US$74.55 a barrel, up 0.03%


Gold: US$1,798 an ounce, up 0.12%


Bitcoin: US$34,785, down 0.07%


6.50am: Early Markets – Asia / Australia


Stocks in the Asia-Pacific region were mostly lower on Wednesday as crude oil prices continued to be volatile.


After jumping to the highest level in six years on Tuesday, gains were wiped out, with U.S. crude oil prices falling more than 2%, while brent tumbled more than 3%.


The wild swings followed a postponement of talks between OPEC and its oil-producing allies after the group failed to reach an agreement on its output policy for August and beyond.


In Japan, the Nikkei 225 dropped 1.36% and South Korea’s Kospi fell 0.77%.


The Shanghai Composite in China gained 0.35% while Hong Kong’s Hang Seng index slumped 1.12%


Shares in Australia gained, with the S&P/ASX 200 trading 0.62% higher.


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