London’s leading share index extended yesterday’s rise as optimism around China’s post-Covid recovery and hopes that the US Federal Reserve may hint at plans to moderate future interest rate rises overshadowed renewed recessionary fears.
Tracking Asia higher, the FTSE 100 perked up 38.62 points, or 0.5 per cent, to 7,593.41 by mid-morning. The prospect of a bounceback in Chinese tourism lifted shares in Burberry by 90p, or 4.4 per cent, to £21.57.
Encouraging headlines from China also boosted Prudential, the insurer that is heavily exposed to Asia, which rose 42p, or 3.6 per cent, to £12.19; Standard Chartered by 17p, or 2.7 per cent, to 657½p; and HSBC by 10½p, or 1.9 per cent, to 540¼p. The more UK-focused FTSE 250 rose 180.62 points, or 0.9 per cent, to 19,315.36.
Also lifting the mood in Europe was lower-than-expected inflation in France, while new data showed business activity in the eurozone contracted less than initially thought, suggesting the bloc’s recession may not be as deep as feared.
Despite house prices being on course to suffer their biggest decline since the financial crisis, shares in London’s big developers ticked higher on hopes of smaller interest rate rises. Taylor Wimpey added 3p, or 2.6 per cent, to 107¼p and Persimmon gained 34p, or 2.7 per cent, to £13.06½.
Advertisement
Other risers included the precious metal miner Fresnillo, up 44¾p, or 5 per cent, to 946¼p as gold prices extended their New Year rally thanks to a weaker dollar and growing expectations of less aggressive interest rate increases.
Meanwhile, Ocado jumped 50p, or 7.7 per cent, to 698½p as fresh Kantar data revealed that British grocery sales rose to a record £12.8 billion in the four weeks to December 25, while separate figures from the British Retail Consortium showed fresh food prices at UK supermarkets last month were 15 per cent higher than a year earlier. Sainsbury’s shares rose 8p, or 3.5 per cent, to 233p and Marks and Spencer was up 5p, or 3.8 per cent, to 131½p.
Weighing on the FTSE 100 were heavyweight oil stocks including Shell and BP, which slipped 53½p, or 2.3 per cent, to £23.14 and 11p, or 2.2 per cent, to 472¾p as crude prices fell on concerns about weak demand. Glencore, the commodities group, also fell 20½p, or 3.8 per cent, to 524p and Anglo American lost 58p, or 1.8 per cent, to £32.08.
