MARKET REPORT
LONDON’S blue chip index followed global stocks higher yesterday, after Hurricane Irma was downgraded and fears over geopolitical tensions with North Korea started to subside.
The FTSE 100 rose nearly 0.5% or 35.99 points to 7,413.59 points, but was surpassed by its European peers including the French Cac 40 and German Dax which ended the day higher by 1.2% and nearly 1.4%, respectively.
Investors who turned to safe haven assets like bonds and gold in light of worsening tensions between US allies and North Korea, started to return to riskier trades like equities, helping give stock markets a boost.
David Madden, a market analyst at CMC Markets UK, said: “The lack of hostilities in relation to North Korea and the downgrading of Hurricane Irma to a category one storm has prompted traders to buy back into the market.
“North Korea celebrated the founding of the state over the weekend, and investors were worried the event could have prompted Pyongyang to mark the occasion by testing a missile.
“Seeing as the North Korean regime didn’t show off its military might over the weekend, traders were encouraged to take on more risk.”
Brent crude prices fell around 0.5% to $53.47 per barrel amid fears that Hurricane Irma would curb demand for oil in Florida, which is one of the largest consumers of oil in the United States.
In UK stocks, Primark owner Associated British Foods fell 162p to 3,103p, despite upping its full-year outlook. AB Foods now expects full-year sales at Primark to rise 13% on a constant currency basis, with the UK seeing particularly strong turnover growth of 10%.
However, investors were disappointed with a warning that the pound’s collapse was pushing up import costs for the low-cost retailer.
The biggest risers on the FTSE 100 were Provident Financial up 30p to 825p, EasyJet up 39p to 1,195p, Carnival up 145p to 5,180p, and International Consolidated Airlines Group up 14p at 607.5p.
The biggest fallers on the FTSE 100 were Associated British Foods down 162p to 3,103p, Convatec Group down 6.4p to 271.8p, Randgold Resources down 125p to 8,000p, and Johnson Matthey down 41p to 2,864p.