Markets up as Biden inauguration drives rally

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The London markets closed higher after the inauguration of Joe Biden sparked the Dow Jones and helped European sentiment rally in the afternoon.

Traders are hopeful that President Biden will not stop after securing last week’s stimulus package and expect more action to invigorate the economy.

The FTSE 100 closed 27.44 points, or 0.41% higher at 6,740.39 at the close of play on Wednesday.

Connor Campbell, financial analyst at Spreadex, said: “Trump is gone, and the markets are buzzing, letting go of some of their anxieties to climb ahead of Joe Biden’s inauguration.

“If not quite at the all-time highs struck by the Nasdaq – which had the benefit of subscriber-magnet Netflix surging 15% – the Dow Jones was still in the ballpark of its own record levels after rising 175 points.

“Basking in the green glow of the American markets, the Eurozone indices got the rub on Wednesday.”

But the FTSE struggled to keep up with the stronger performances elsewhere in Europe as it was weighed down by the soaring pound, which hit its highest peak since May 2018 against the dollar.

Sterling was buoyed by better-than-expected inflation figures, with Consumer Price Inflation at 0.6% in December from 0.3% in the previous month.

The pound increased by 0.15% versus the US dollar to 1.365 and was up 0.25% against the euro at 1.127.

Elsewhere in Europe, stocks were broadly flat for large parts of the day before the major markets followed the Dow Jones’ lead.

The German Dax was 0.71% higher and the French Cac moved 0.53% higher.

Back in the UK, banking firms including Lloyds, HSBC and Standard Chartered were among the fallers in the face of the rising pound.

In company news, pub giant JD Wetherspoon saw shares bounce to their strongest since March after it secured £94 million in its equity raise.

The group said it plans to use the money to shore up its finances and invest in new sites in London to grow again once pandemic restrictions lift.

Shares in the company moved 61p higher to 1,244p at the close of play.

Electronics retailer Dixons Carphone drifted lower despite reporting a surge in online orders.

It closed 4.1p lower at 119.3p after it reported a dive in mobile sales following the closure of all its Carphone Warehouse retail stores.

Elsewhere, WH Smith rose to the top of the FTSE 250 after the high street stalwart said it outperformed sales expectations in December, when it delivered sales at 67% of the level from December 2019.

Shares were 162p higher at 1,717p at the close of play as a result.

The price of oil moved higher too amid hopes that the new president’s plans to stimulate the economy can drive an increase in demand.

The price of Brent crude oil increased by 0.8% to $56.36 per barrel.

The biggest risers on the FTSE 100 were Pearson, up 58.2p at 737.2p, Johnson Matthey, up 179p at 2,916p, Burberry, up 67p at 1,805p, and Informa, up 19p at 541.8p.

The biggest fallers on the FTSE 100 were GlaxoSmithKline, down 30.6p at 1,379.8p, Avast, down 9p at 531p, Standard Chartered, down 7.4p at 469.2p, and Experian, down 33p at 2,646p.

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