Stock markets: FTSE 100 gains as China relaxes fiscal policy
13:05, 24 November 2021
UK stocks inched up slightly on Wednesday, with the FTSE 100 gaining as mining and energy stocks pulled up the market. This was largely due to China announcing relaxations in their fiscal policy and pledging to offer more support to the property sector, which has been struggling with debt recently.
European stocks, however, were more subdued, with the Euro Stoxx 50 dropping on the back of increased Covid-19 concerns, even as Purchasing Managers’ Index data for the region proves to be more positive than expected. However, in the short term, investors are likely to be concerned about the effects of fresh lockdowns and supply chain bottlenecks on businesses.
Overnight in Asia, Hong Kong’s Hang Seng Index also increased, with the US S&P 500 following suit.
What is interesting today: Luxury goods retailer Mulberry saw its share price jump 24% as it reported sales to be back to pre-pandemic levels and credited its UK factories for successfully weathering supply chain issues. The group also reported earnings of approximately £66m ($88.2m).
Why are stocks up today?
China relaxes fiscal policy: Mining stocks gained as China announced that it would be relaxing its fiscal policy and providing more support to the property sector.
What is your sentiment on UK100?
- What this means: Miners and property developers have been some of the most affected during the pandemic, especially those with significant interest in Chinese markets, as property developer Evergrande struggles to come out of debt. This has caused significant instability in the property sector lately and has caused worries about demand for mining products. Thus, China’s pledge to support the property sector more and relax its fiscal policy comes as a welcome relief and bolsters hopes of recovery in the sector.
- The FTSE 100 inched up 0.12% to touch 7275.1
- The Euro Stoxx 50 edged down 0.14% to 4277.7
- Germany’s DAX Index fell 0.35% to 15880.6
- France’s CAC 40 dipped 0.20% to 7030.2
- The leading sectors were commercial services and consumer durables; consumer services and technology services took a hit
- The US S&P 500 futures fell 0.44% to $4,667.8
- The CBOE Volatility Index, or VIX, a measure of expected fluctuations in US stocks, dropped 0.10% to $19.36, as market anxieties stabilised somewhat
- The US Dollar Index climbed up for the fourth day in a row to $96.76, as the demand for safe-haven assets increased
- The US 10-year bond yield dropped to 1.676%
Top stock gainers: UK and Europe
- The top stock gainers in the UK were Intertek Group, Barratt Developments and Persimmon
- Intertek shares rallied after the company revealed that it was on track to deliver strong yearly revenues and growth
- Barratt Developments shares gained after an upgrade by Berenberg marking their shares as “buy”
- Persimmon shares increased after hiring a new managing director, Ian Beal
- The best performing companies in Europe were GlaxoSmithKline, VINCI and TotalEnergies
- GlaxoSmithKline shares rallied after the company won a contract worth approximately $1bn to supply Covid-19 antibody treatment to the US government
- VINCI shares gained after the company planned to acquire more public works contractors from Canada
- TotalEnergies shares did well after the company won fresh deals in Libya
Top stock losers: UK and Europe
- The top stock losers on the FTSE 100 were Entain, Aveva Group and International Consolidated Airlines Group
- Entain shares fell after the group bid approximately $1bn to acquire Olympic Entertainment Group
- Aveva Group’s shares struggled to recover from acquisition costs incurred recently, which increased losses
- International Consolidated Airlines Group shares dipped as the group faced an inquiry regarding its recent Air Europa purchase
- The worst performing companies on the Euro Stoxx 50 were Airbus, Santander and Bayer
- Santander shares were still down today following yesterday’s online banking system crash, which resulted in several clients being unable to access their accounts
- Bayer shares fell after the company dropped a patent infringement lawsuit related to the cancer drug Nexavar
What you need to know today
- Britvic reports increased revenues despite cost constraints
- Brewin Dolphin shares drop in spite of increased yearly profits
- Delhivery sells minority stake to FedEx
Read more: Bayer buys US biotech firm Vividion Therapeutics for bn
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