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MARKET WRAP: FTSE rallies, GBP hits two-week high, Bitcoin jumps

Economy1 hour ago (Oct 14, 2021 16:35)

© Reuters.

Key Points

FTSE 100 closing price of 7,208.7, +0.9%
Miners, energy companies lift FTSE
Domino’s fails to deliver
GBP hits two-week high
Oil higher despite stockpile build
Nat Gas jumps following storage report
Bitcoin trades above $58,000

By Samuel Indyk – The FTSE 100 finished above 7,200 for the first time since 13th August on Thursday as another jump in basic materials shares lifted the blue-chip index.

Antofagasta (LON:ANTO), Rio Tinto (LON:RIO), Glencore (LON:GLEN), and Anglo American (LON:AAL) all saw their shares increase by at least 3% as metals prices continued to move higher.

Tesco (LON:TSCO) underperformed as the supermarket retailer went ex-dividend.

In the midcap FTSE 250, Domino’s Pizza Group (LON:DOM) shares declined despite recording another jump in sales. However, as the tailwinds from Covid look set to fade, the company may struggle to match the growth seen since the start of the pandemic.

“People are now able to go to restaurants again, and that Saturday night in watching Netflix (NASDAQ:NFLX) with the family has got a bit monotonous, so there is temptation to get out and about in pubs and bars,” said AJ Bell Investment Director Russ Mould.

Mould also pointed out that expectations of a higher cost of living could also begin to impact sales.

“If your energy bill is racing upwards and the weekly food shop is starting to become a lot more expensive, an easy way to save money is to cut back on treats like Domino’s,” Mould added. “Therefore, life could get a lot tougher for the business in the coming months.”

GBP was again strong against both the EUR and USD. GBP/USD briefly traded above 1.3700 and EUR/GBP was heading towards 0.8450 as expectations of a Bank of England rate hike before the end of the year continue to support GBP.

However, a speech from Silvana Tenreyro, one of the more dovish members on the rate-setting Monetary Policy Committee, suggested that she would be in no hurry to lift the Bank Rate. Tenreyro said raising interest rates to combat a temporary rise in inflation would be “self-defeating”.

WTI and Brent Oil Futures were both trading higher despite a build in US crude inventories in the latest week. The EIA said stockpiles rose by 6.088 million barrels in the latest week, versus expectations of a build of 700,000 barrels. However, a decline in gasoline and distillates stocks was seen during the week.

US Natural Gas Futures surged back towards $6 after the weekly gas storage report from the EIA. There was a net increase of 81 Bcf in the latest week, below expectations of a build of 91 Bcf. The EIA added that stocks were 501 Bcf less than last year at this time and 174 Bcf below the five-year average.

Bitcoin surged above $58,000 in early trade as expectations that a Bitcoin futures ETF will be approved by this time next week continue to build. Other major cryptocurrencies were also posting solid gains with Ethereum trading up $3,800 for the first time since September 7th.


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MARKET WRAP: FTSE rallies, GBP hits two-week high, Bitcoin jumps

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