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Stock markets: Commodity and banking stocks lift FTSE 100

By Indrabati Lahiri

14:00, 26 January 2022

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Stocks chart
Stocks chart – Credit: Shutterstock

UK stocks moved higher Wednesday, with the FTSE 100 index bolstered by commodity and banking shares, as investors await a policy statement by the US Federal Reserve (Fed). The announcement, later today, could indicate future moves on interest rates.

European stocks also rose, with the Euro Stoxx 50 index gaining as the beginning of the travel sector recovery has helped reassure investors that the Omicron peak may be passing.

Overnight in Asia, Hong Kong’s Hang Seng (.HK50) index climbed.

The S&P 500 opened higher.

DE40

14,214.40 Price
-0.600% 1D Chg, %
Long position overnight fee -0.0086%
Short position overnight fee 0.0004%
Overnight fee time 22:00 (UTC)
Spread 2.0

US100

11,447.80 Price
-0.930% 1D Chg, %
Long position overnight fee -0.0164%
Short position overnight fee 0.0059%
Overnight fee time 22:00 (UTC)
Spread 1.8

HK50

19,091.00 Price
-1.580% 1D Chg, %
Long position overnight fee -0.0295%
Short position overnight fee -0.0149%
Overnight fee time 22:00 (UTC)
Spread 6.0

US30

33,520.00 Price
-0.240% 1D Chg, %
Long position overnight fee -0.0164%
Short position overnight fee 0.0059%
Overnight fee time 22:00 (UTC)
Spread 3

What’s interest today: Pets at Home shares rose 4.8% after the group upgraded its fiscal 2021/22 profit guidance. Wizz Air added 3.2%. The low-cost carrier expects fourth quarter losses, but with an upturn in spring.

Why are stocks up today?

Interest rate hikes on the horizon: Investors are anticipating potential interest rate hikes soon and may learn more when the Fed issues its policy statement.

  • What this means: Investors have been anticipating potential interest rate raises by the major central banks of the world, such as the Bank of England, the US Fed and the European Central Bank for a while now as inflation quickens. The Fed may provide more insight on its future moves when its releases its policy statement later today.

Stocks markets: key highlights

  • The FTSE 100 (.UK100) index inched up 1.73% to 7498.9 points
  • The Euro Stoxx 50 (.EU50)index climbed up to 2.32% to 4172.4 points
  • Germany’s DAX (.DE40) index inched up 2.21% to 15457.9 points
  • France’s CAC 40 (,FR40) index rose 2.23% to 6990.2 points
  • The leading sectors in the UK were energy and consumer non-durables, whereas health technology and electronic technology lagged behind
  • US S&P 500 opened higher at 4,408.43.

Market sentiment

  • The CBOE Volatility Index, or VIX (.VIX), a measure of expected fluctuations in US stocks, dropped to 28.65
  • The US dollar index dropped to $96.12
  • The US 10-year bond yield index increased to 1.792%

Top stock gainers: UK and Europe

  • The top stock gainers in UK were BP, British American Tobacco and HSBC Holdings
  • BP shares gained. The company has said fast electric vehicle chargers are nearing profitability.
  • British American Tobacco shares held on to their advances. The company was recently named the Global Top Employer for the fifth year in a row
  • HSBC Holdings shares increased. This week the bank received an ESG value of 76
  • The best performing companies in Europe were Koninklijke Phiips, BNP Paribas and BASF
  • Philips shares are bouncing back following last summer’s ventilator recall
  • BNP Paribas is partnering with Apollo to create an inventory finance platform
  • BASF shares rallied. The company is releasing Peptovitae, a series of patented peptides

Top stock losers: UK and Europe

  • The worst performing companies in UK were Dechra Pharmaceuticals, Halma and Croda International
  • Dechra Pharmaceuticals continued its struggle of the last few weeks following a “neutral” rating received by BNP Paribas
  • Halma extended its losses further following a recent “hold” rating by brokerages
  • Croda International shares continued to lose following a “hold” rating from Deutsche Bank
  • The top stock losers in Europe are Kone, VINCI and Deutsche Borse
  • Kone recently won the Elevator Project of the Year award
  • VINCI recently acquired ACS’ energy business
  • Deutsche Borse recently completed the acquisition of digital asset trading and brokerage Crypto Finance.

Read more: Stock markets: UK, European stocks advance as interest-rate hikes loom

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

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