FTSE 100 rebounds as easyJet nosedives
London’s FTSE 100 index has climbed by 0.64 per cent today, up 45 points higher than the previous close at 7,074.07, after being boosted by financial stocks.
Banking giants saw strong gains today with Lloyd’s Group up 2.6 per cent, Standard Chartered Bank lifted by 2.4 per cent and Barclays PLC climbing 2.2 per cent. Meanwhile, investment fund, Perishing Square Holdings, jumped by 2.8 per cent.
Royal Mail led the pack with share prices increasing by 3.5 per cent following news that the company has inked a deal to deliver packages for Amazon. Meanwhile at the other end of the spectrum, Associated British Foods shed 3.1 per cent.
Today’s strong FTSE100 performance follows the worst week for the market since August, with the capital’s premiere index threatening to dip below 7,000 after the government announced a national insurance tax hike.
Analysts Say
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said that ongoing worries about inflation “are holding back more dramatic gains.”
“These concerns are reflected in the HL investor confidence survey which showed confidence in the UK market has fallen by 4% and by 5% for the US in September,” Streeter added. “Higher prices alongside a weaker recovery, as evidence in recent US jobs data and also the UK’s GDP reading for July is leading to fears of a stagflation scenario emerging.”
FTSE 250
The mid-cap FTSE 250 index also rose by 0.22 per cent, inching up by 51 points to 23,785.25.
Energy providers led the way with Tullow Oil jumping eight per cent and Harbour Energy gaining 3.8 per cent.
In the aviation industry, where travel restriction continue to bite, easyJet was sent into a tailspin with shares falling 14.2 per cent.
Michael Hewson, the chief financial analyst at CMC markets, commented on the airline’s share price. He said, “today in a sign that management want to be able to ride out what could be a difficult winter season easyJet has announced that it is looking to raise another £1.2bn from a fully underwritten rights issue.
“Unsurprisingly the shares haven’t reacted well to this announcement falling sharply as shareholders face having to fork out more extra cash.”
Markets abroad
Across the pond, key market benchmarks in the US were down this morning. Dow Jones fell 0.78 per cent while the S&P 500 and NASDAQ 100 dropped 0.77 per cent.
Contracting markets follows news that the Democrats plan to propose raising the corporate tax rate to 26.5% from 21% as part of sweeping plans to increase taxation of the wealthy.
Read more: London markets dragged down by tax hikes as City mulls impact on portfolios