- FTSE 100 climbs 44 points to 7,997
- Commodities stocks lead risers on China data
- Shop price inflation eased further in March
9.30am: FTSE 100 closing in on all-time high
The FTSE 100 is closing in on a record high of 8,004, which was achieved last February.
Fuelling gains was news UK shop price inflation hit a more than three-year low of 1.3% in March, against 2.5% in February, as per figures from the British Retail Consortium.
Data from Nationwide showed house prices had continued to fall in some areas of England over the first quarter meanwhile, but were up 0.4% across the board.
9.07am: FTSE 100 leads Europe’s indexes
London is leading the way in Europe, though the continent’s main share indices are mostly in the green.
The Footsie is up 0.7% at 8006, with miners and oilers the main driving force. Asia-focused banks HSBC and Standard Charted are also up, following encouraging data from China in recent days, though more UK domestically aligned lenders are also firmly positive.
Over on the continent, Germany’s DAX is up 0.15%, France’s CAC has risen 0.3%, Spain’s IBEX is just above flat and Italy’s FTSE MIB just below.
The wider Euro Stoxx 600 is up 0.4% at 514.71 and the STOXX 50 up 0.5%.
“European markets have kicked off the first session of the second quarter on a positive note with the FTSE 100 leading the charge, driven by commodity stocks like Fresnillo, Glencore, Shell and BP,” says Victoria Scholar, head of investment at Interactive Investor, also noting that GSK and Reckitt Benckiser are stuck at the bottom of the index.
“Oil prices continue to stage gains with WTI and Brent crude in the green after closing at five-month highs on Monday thanks to tightening supplies as well as strong US demand.
“In the US, focus is on Tesla’s quarterly deliveries – Wall Street is expecting a disappointing quarter on the back of weak demand for electric vehicles and higher interest rates. Bloomberg’s consensus is for 449,080 vehicle deliveries, down 7% from the fourth quarter. Shares in Tesla have already fallen by nearly 30% so far this year.”
8.42am: Blue-chips break above psychological barrier
The FTSE 100 has broken above 8000, with a gold and silver miner top of the leaderboard as geopolitical tensions lift precious metals prices.
Up just over 50 points this morning, the index has climbed to 8,003.53, a gain of 0.64%.
Precious metals miner Fresnillo is top of the tree.
Some comment on what’s driving the commodities rises, with copper and iron ore prices gaining on strong Chinese PMI data while gold defies the higher US yields and a stronger dollar to hit a fresh record of $2,264 yesterday. It retreated but is back on the up again today at $2,254.
“The price of an ounce [of gold] hit a fresh record yesterday on the back of rising uncertainties regarding the actual risk rally and the mounting geopolitical tensions after Israel has reportedly bombed the Iran embassy in Damascus,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
This has also boosted oil prices, says Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown. “An Israeli airstrike on Iran’s embassy in Syria, which has killed Iran’s top commander, has reignited geopolitical tensions, and squeezed the oil price higher in return.
“Brent crude is now trading at over $88 a barrel, as concerns over supply spill over into the price. At the same time, there’s little expectation that OPEC’s production policies will loosen, adding further pressure.”
Later this morning, investors will be watching German CPI data and Eurozone final manufacturing numbers.
Ozkardeskayasays says soft figures could further revive the European Central Bank doves and increase the downside pressure on the euro.
Later on, it will be US jobs and factory order data. “Job openings are expected to have further fallen while factory orders are expected to have jumped in February. Any positive surprise on both data should continue to soften the Fed doves’ hands into Friday’s official jobs data and back a further rally in the US dollar across the board,” she says.
8.17am: FTSE 100 tantalisingly close to 8000 level
The FTSE 100 has shot higher in early trading, tantalisingly close to the 8,000 mark last broken over a year ago.
After a quarter of an hour, the blue-chip index had risen almost 47 points to 7,999.38.
Miners and oilers led the push higher, with commodities giant Glencore PLC (LSE:GLEN) and precious metals miner Fresnillo PLC (LSE:FRES) the top risers.
China data is a likely reason, with the Caixin manufacturing index rising to its highest in 13 months, echoing an improved reading in the weekend’s official manufacturing gauge for March as both manufacturing PMIs reach positive territory for the first time since September.
“China stocks notched their biggest daily gain in a month yesterday after the latest manufacturing PMI data reinforced economic recovery hopes in the world’s second biggest economy,” noted Deutsche Bank analyst Peter Sidorov.
Not far behind on the London leaderboard are Antofagasta PLC (LSE:ANTO), Rio Tinto PLC and Anglo American PLC (LSE:AAL), along with oil majors BP PLC (LSE:BP.) and Shell PLC (LSE:SHEL, NYSE:SHEL).
Higher crude oil prices have lifted the latter, with Brent crude futures up 0.8% to $88.10 a barrel.
7.58am: Car dealer deal?
Car dealer Inchcape PLC (LSE:INCH) may have found a potential interested buyer in US rival AutoNation, Inc. (NYSE:AN).
In January the company said it had received “approaches from a number of interested parties” and was reviewing options for its UK retail business, potentially including a sale.
Sky News reports that AutoNation is “among the suitors circling the business” and is at the early stages of considering an offer.
Six months ago, the US group withdrew from a bidding war for Inchcape’s UK rival Pendragon.
7.44: House prices still falling in parts of England
Looking deeper into the Nationwide housing market data, house prices in much of southern England continued to fall in the first quarter of the year.
Overall, prices in England in the first quarter of 2024 were up 0.4% compared with a year earlier, though this is thanks to rises in the North, North-West and London.
House prices were down most in the south-west of England, down 1.7%, followed by East Anglia, down 1.3%, the south-east outside London, down 1%, and the outer London area, down 0.6%.
However, all these regions saw declines ease compared to the sharp falls in the last quarter of 2023.
7.16am: Blue-chips called slightly higher
The FTSE 100 is predicted to inch higher as trading begins after the long Easter weekend, buoyed by more encouraging inflation data.
London’s blue-chip index has been called two points higher on Tuesday morning on spread-betting platforms, having closed the past week at 7,952.62.
US stocks had a mixed session overnight, with the Dow Jones and S&P 500 falling 0.6% and 0.2% respectively, but the Nasdaq adding another 0.1% as most of the tech lumbered higher megacaps (Apple and Tesla were the exceptions).
This morning, investors in the UK are waking up to news that shop price inflation faded to a more than three-year low last month.
Shop prices in March were up 1.3% on a year ago, according to an index compiled by the British Retail Consortium and NielsenIQ, which was down from 2.5% in February, below the three-month average of 2.2% and the lowest since December 2021.
Non-food inflation retreated to 0.2% from 1.3% a month earlier, while food inflation softened from 5.0% in February to 3.7% in March, the lowest reading since April 2022.
It was the tenth consecutive deceleration in food inflation.
Meanwhile, annual house price growth edged up in March, according to Nationwide.
UK house prices were up 1.6% compared with a year ago, compared to 1.2% in February.
On a monthly basis they were down 0.2%, however, following 0.7% growth the month before.
